Hi, I've been working with a Japanese MNC as an HR Executive for the past 11 months (I joined in July 2007).
In our company, it has been said that I can claim LTA only after the completion of one year. Why is it so, if the Government of India has a 4-year block, i.e., 2006-09 Jan-Dec?
Secondly, if I switch to some other company, will I still get the LTA, or can I claim it only after one year, i.e., July 2007? Why is it so?
Thirdly, after switching to some other company, can I claim LTA every year? Our company says that an employee can claim the stated LTA amount every year. How true is it, and is it valid from a legal point of view? Can someone please answer these questions? It will be of great help for me to understand and explain this to others.
Regards,
Chinmay Desai.
From India, Mumbai
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In our company, it has been said that I can claim LTA only after the completion of one year. Why is it so, if the Government of India has a 4-year block, i.e., 2006-09 Jan-Dec?
Secondly, if I switch to some other company, will I still get the LTA, or can I claim it only after one year, i.e., July 2007? Why is it so?
Thirdly, after switching to some other company, can I claim LTA every year? Our company says that an employee can claim the stated LTA amount every year. How true is it, and is it valid from a legal point of view? Can someone please answer these questions? It will be of great help for me to understand and explain this to others.
Regards,
Chinmay Desai.
From India, Mumbai
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Hi Chinmay, What ever information I have I am sending to you. Regards, vikas
From India, Pune
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From India, Pune
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Here is the corrected and formatted text:
Please find below the criteria for availing LTA:
LTA is tax-free for the amount you have submitted the bills. Say in your package LTA is 25,000/- and you have performed a journey for 15,000/- and submitted the relevant documents, 15,000/- is exempted from tax as per Sec 10 of the IT Act, and the remaining amount is taxable. The present block is January 2006 to December 2009. Only domestic travel will be considered for claiming LTA.
LEAVE TRAVEL CONCESSION
L.T.C. is granted to an employee in connection with the journey on leave by him or his family. It is exempt from income tax within certain limits as under:
For availing this benefit, the employee should at least use his one day PL (Privileged Leave).
Exemption is limited to the amount actually spent.
Only two journeys in a block of 4 years are exempt. The block of four calendar years commencing from 1986. The fresh block commences from 1 January 2006 to 31 December 2009.
If LTA has not been availed during any of the specified four-year block periods on one of the two permitted occasions (or on both occasions), exemption can be claimed in the first calendar year of the next block (but in respect of only one journey). This is known as the "Carry-over concession." In such a case, the exemption so availed will not be counted for the purpose of claiming the future exemptions allowable in respect of 2 journeys in the subsequent block.
The quantum of exemption is limited to expenses on airfare, rail fare, bus fare only. No other expenses like scooter charges at both ends, porterage expenses during the journey, and lodging/boarding expenses will qualify for exemption.
If the journey is performed by a circuitous route, the exemption is limited to admissible only to the shortest route. Where the journey is performed in a circular form touching different places, the exemption will be limited to what is admissible for the journey from the place of origin to the farthest point reached by the shortest route.
Family in relation to an individual means: spouse and children of the individual, and the parents, brothers, and sisters of the individual who are wholly and mainly dependent on him.
Exemption is available in respect of two children born after October 1, 1998.
Journey in different situations:
Journey performed by air: Economy fare of the National carrier by the shortest route or the amount spent, whichever is less.
Journey performed by Rail: Amount of First-Class rail fare by the shortest route or amount spent, whichever is less.
Origin and destination of the journey connected by rail and journey performed by any other mode of transport: Amount of First-Class rail fare by the shortest route or amount spent, whichever is less.
Where recognized public transport exists: First-class or deluxe class fare by the shortest route or amount spent, whichever is less.
Where no recognized public transport system exists: Amount of First-Class rail fare by the shortest route or amount spent, whichever is less (as if the journey had been performed by rail).
In case the L.T.A. is encashed without actually performing the journey, the entire amount received by the employee would be taxed in his hands.
From India, Gurgaon
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Please find below the criteria for availing LTA:
LTA is tax-free for the amount you have submitted the bills. Say in your package LTA is 25,000/- and you have performed a journey for 15,000/- and submitted the relevant documents, 15,000/- is exempted from tax as per Sec 10 of the IT Act, and the remaining amount is taxable. The present block is January 2006 to December 2009. Only domestic travel will be considered for claiming LTA.
LEAVE TRAVEL CONCESSION
L.T.C. is granted to an employee in connection with the journey on leave by him or his family. It is exempt from income tax within certain limits as under:
For availing this benefit, the employee should at least use his one day PL (Privileged Leave).
Exemption is limited to the amount actually spent.
Only two journeys in a block of 4 years are exempt. The block of four calendar years commencing from 1986. The fresh block commences from 1 January 2006 to 31 December 2009.
If LTA has not been availed during any of the specified four-year block periods on one of the two permitted occasions (or on both occasions), exemption can be claimed in the first calendar year of the next block (but in respect of only one journey). This is known as the "Carry-over concession." In such a case, the exemption so availed will not be counted for the purpose of claiming the future exemptions allowable in respect of 2 journeys in the subsequent block.
The quantum of exemption is limited to expenses on airfare, rail fare, bus fare only. No other expenses like scooter charges at both ends, porterage expenses during the journey, and lodging/boarding expenses will qualify for exemption.
If the journey is performed by a circuitous route, the exemption is limited to admissible only to the shortest route. Where the journey is performed in a circular form touching different places, the exemption will be limited to what is admissible for the journey from the place of origin to the farthest point reached by the shortest route.
Family in relation to an individual means: spouse and children of the individual, and the parents, brothers, and sisters of the individual who are wholly and mainly dependent on him.
Exemption is available in respect of two children born after October 1, 1998.
Journey in different situations:
Journey performed by air: Economy fare of the National carrier by the shortest route or the amount spent, whichever is less.
Journey performed by Rail: Amount of First-Class rail fare by the shortest route or amount spent, whichever is less.
Origin and destination of the journey connected by rail and journey performed by any other mode of transport: Amount of First-Class rail fare by the shortest route or amount spent, whichever is less.
Where recognized public transport exists: First-class or deluxe class fare by the shortest route or amount spent, whichever is less.
Where no recognized public transport system exists: Amount of First-Class rail fare by the shortest route or amount spent, whichever is less (as if the journey had been performed by rail).
In case the L.T.A. is encashed without actually performing the journey, the entire amount received by the employee would be taxed in his hands.
From India, Gurgaon
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Hi, The Block of 4 years concept is applicable for Public Limited companies or Govt only?
From India, Chennai
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1From India, Chennai
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Leave Travel Allowance.doc
LTA -Claim.pdf