What is Leave Travel Allowance and how to claim LTA exemption while filing returns

Leave Travel Allowance (LTA) can be beneficial in lowering your tax liability. LTA refers to the allowance given to an employee for personal outstation travel. It can be claimed only in case of travelling within India and not for foreign travel. In a block of four calendar years, LTA exemption is available for two journeys, and the current block is from 2018 to 2021 as people could not travel during the COVID pandemic. The LTA exemption is given to the employee and his/her family, including children, spouse, siblings, and dependent parents. For people born after 1998, the LTA can be claimed for a maximum of two children. It should be noted that the salary structure offered by the employer determines the LTA. It may not be available if this benefit hasn’t been extended to you by your employer. How to claim LTA? In a multi-destination journey, there is an exemption for the travel cost from the origin place to the farthest place in the journey through the shortest route. If an employee has not availed exemption within the block of four years in any year with respect to one or two journeys, then he/she can carry the exemption to the next block. The benefit can be availed in the succeeding block’s first calendar year. If you are thinking of claiming the LTA benefit, make sure to keep the travel agent’s invoice, travel tickets, and other travel proof with yourself as you may require them if your employer asks for documentation. The benefits of LTA are only available for travel expenses, and not the expenses of food and stay. The allowed travel expenses under LTA are subject to terms and conditions. Note that it is essential to be on leave during the time one is claiming LTA. You should prefer claiming LTA benefits for a journey where higher actual expenses were incurred. For instance, imagine that you avail LTA for a trip in which a much lower cost was incurred in comparison to the travel expense permitted according to the I-T Act and the specified LTA threshold in your CTC. In this scenario, you will exhaust your LTA option for a meager tax-saving benefit. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.