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LTA | Meaning and Definition

What is LTA?

LTA full form is Leave Travel Allowance. It is a tax exemption for an allowance granted to an employee by his or her employer for travel expenditures while on leave. Leave Travel Allowance is subject to a number of requirements. An employee must organize their trip around the goal of successfully obtaining an leave travel allowance exemption. The Indian income tax administration has outlined several criteria and procedures for obtaining exemptions under the LTA. 

Conditions For Claiming Leave travel allowance

  •   To be eligible for the LTA exemption, you must make the trip.
  •   Only domestic travel qualifies for the exemption. LTA does not cover overseas travel.
  •   The travel exemption is applicable for the employee alone or with his family, which includes the employee’s spouse, children, completely or primarily dependent parents, siblings, and sisters. Furthermore, no more than two children of an employee born after October 1, 1998, are eligible for this exemption. There are no restrictions for children born before October 1, 1998. Furthermore, this restriction does not apply to multiple births on a second occasion after having one kid.  

LTA rules for exemption

Here are certain rules for exemption:

1. Employees can travel to any place in India

Travelling to any place across India is allowed under LTA. The exemption is made for the travel made via public transport rather than their private transportation. However, it can vary from organization to organization.

2. No international trips are considered

An employee is not eligible for Leave Travel Allowance if that employee is travelling abroad. This amount will be reimbursed separately if he is travelling for work related purpose.

3. Actual journey should be made

An employee cannot claim Leave Travel Allowance without travelling. In order to claim this allowance he has to travel related to work. 

4. Food, stay or other expenses are not included

Food, stay or any other expenses are not included in this allowance. Only amount spent on travel is allowed to be reimbursed. 

5. Family of the employee also gets an exemption

The family members of employee travelling with them can also claim an exemption.

FAQs (Frequently Asked Questions)

LTA stands for Leave Travel Allowance. It is an important component of employee’s wage structure. 

Leave Travel Allowance (LTA) is an important component of the wage structure that aids in tax savings. LTA can only be claimed for travel fare or tickets within India; expenses for lodging or any other fee are not eligible for exemption.

No, LTA cannot be claimed without travelling. An employee has to show the proof of travel while claiming the LTA.

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