How employees can make full use of their Leave Travel Allowance?

Posted in , on January 7, 2017

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In many organisations, the year-end holidays are a norm. In others, the employees apply for long leave in advance, well ahead of their travel schedule. And if the travel costs are reimbursed by the employer, nothing like it.

Employees who are eligible for Leave Travel Allowance (LTA), as part of their Cost-to-Company (CTC), can claim reimbursement of expenses incurred on travel. This reimbursement is not included in taxable income subject to certain limits and conditions. LTA tax break can be claimed for travel of self and family members for journeys undertaken only within India.

Family includes spouse and children, whether dependent or not, and parents, brothers, sisters who are fully or mainly dependent on him. LTA tax break is not available for more than 2 children if born after 01.10.1998. This restriction does not apply to children born before 01.10.1998.

The non-taxable reimbursement of travel costs is limited to the actual expenses incurred on air, rail and bus fares only. No other expenses, like local conveyance, sightseeing, etc., qualify for the tax break, which is not available every year. It is available for 2 journeys in a block of 4 years. The block applicable for the current period is calendar year 2014-17. The previous block was calendar year 2010-2013.

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