As the name itself suggests, it is an exemption for allowance/assistance received by the employee from his employer for traveling on leave. Though it sounds simple, many factors need to be kept in mind before planning the travel for the purpose of claiming a Leave Travel Allowance (LTA) exemption. Income tax provision has laid down rules with respect to claiming exemption of LTA.
Let us understand the conditions/requirements for claiming the exemption.
- Actual journey is a must to claim the exemption
- Only domestic travel is considered for exemption i.e., travel within India. No international travel is covered under Leave Travel Allowance.
- The exemption for travel is available for the employee alone or with his family, where ‘family’ includes the employee’s spouse, children, and wholly or mainly dependent parents, brothers, and sisters of the employee. Further, such an exemption is not available for more than two children of an employee born after 1 October 1998. Children born before 1 October 1998 do not have any restrictions. Further, cases of multiple births on a second occasion after having one child are also not affected by this restriction.
Leave Travel Allowance Exemption:
LTA exemption is available for only two journeys performed in a block of four calendar years
A block year is different from a financial year and is decided by the Government for LTA exemption purposes. It comprises 4 years each. The very first 4-year block commenced in 1986. List of block years are 1986-1989, 1990-93, 1994-97, 1998-2001, 2002-05, 2006-09, 2010-13 and so on. The block applicable for the current period is the calendar year 2018-21. The previous block was the calendar year 2014-17.