Which Tax Regime to choose?

Calculate your Tax Liability and compare Old & New Tax Regime
Slider

LTA : Rules, Tax Exemptions and Conditions to claim

author portrait

Hiral Vakil

Form 12BB
LTA
Salary Components
Salary Income

LTA (Leave Travel Allowance) is an allowance paid by employers to their employees when they are on leave and traveling alone or with family within India. Subject to certain conditions, it is tax-free in the hands of the employees.

From FY 2020-21 onward, employees opting for New Tax Regime can not claim an exemption on HRA. HRA Exemption is only available if an employee opts for the Old Tax Regime.
Tip
From FY 2020-21 onward, employees opting for New Tax Regime can not claim an exemption on HRA. HRA Exemption is only available if an employee opts for the Old Tax Regime.

LTA Exemption

Section 10(5) of the Income Tax Act along with and Rule 2B have prescribed the conditions and amount of exempt leave travel allowance. Subject to these conditions, Leave Travel Allowance is tax-free in the hands of the employees.

ITR for Salaried Individuals
CA Assisted Income Tax Return filing for individuals having salary, one house property & income from other sources.
[Rated 4.8 stars by customers like you]
ITR for Salaried Individuals
CA Assisted Income Tax Return filing for individuals having salary, one house property & income from other sources.
[Rated 4.8 stars by customers like you]

Conditions to Claim LTA Exemption

Guide : Salary Income and Taxes
Learn more about Salary Income and the taxes Associated it
Read More
Guide : Salary Income and Taxes
Learn more about Salary Income and the taxes Associated it
Read More

FAQs

Can I claim LTA on internation travel?

No. LTA can be claimed only for domestic travel. You can only claim LTA if the Employer provides it as part of your salary structure. You can claim an exemption on LTA under section 10.

Can I claim LTA every year?

No. You can claim LTA only twice in a block of 4 years. The current block of four years is 2018-2021. However, you can claim LTA reimbursement every year from your employer.

Do I have to submit any document proof to claim LTA?

Employees do not have to submit any proof to Income Tax Department while filing ITR on IT Portal. However, employees are advised to maintain proofs such as flight tickets, invoices from travel agents, passes, etc.

How to know exempt LTA amount?

Employees can know exempt Leave Travel Allowance amount from Form 16 issued by the employer at the end of the financial year. It is exempt u/s 10(5) of the Income Tax Act.

Which ITR can be filed if LTA exemption is claimed?

Since Leave Travel Allowance is a part of salary income. An employee can file ITR-1 while claiming exempt HRA. However, salaried needs to file ITR-2 if income is more than Rs. 50,00,000.

Got Questions? Ask Away!

  1. Hey @sushil_verma

    There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.

  2. Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.

    For eg,

    • Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
    • Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
    • Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.

    Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.

Continue the conversation on TaxQ&A

1 more reply

Participants

Close Bitnami banner
Bitnami