Go away Journey Allowance: Tax Exemption of LTA/LTC

Many employers give Go away Journey Allowance (LTA) to their workers which may be claimed if an worker goes on a trip. This Go away Journey Allowance (LTA) may be claimed when an worker goes on a trip and submits the precise payments to the employer. This quantity can also be typically known as Go away Journey Concession (LTC).

Totally different employers give totally different quantities as Go away Journey Allowance (LTA) relying on the place at which the worker is working. On the time of submitting the earnings tax return, the quantity obtained as Go away Journey Allowance is exempted to a specified stage for the aim of computing Revenue chargeable to tax below head Salaries.

The quantity obtained as LTA/LTC is taxed as:-

LTA/LTC Obtained  xxx
(Much less) LTA/LTC Exempt (xxx)
Quantity chargeable to tax  xxx

The quantity so computed after claiming this exemption can be chargeable to tax as per the Revenue Tax Slabs of the taxpayer for that Evaluation Yr.

  • Really helpful Learn: Revenue Tax Slab Fee

Tax Exemption of Go away Journey Allowance

Revenue Tax exemption for Go away Journey Allowance is out there u/s 10(5) from an quantity obtained by an worker from his employer for himself or his household. This exemption is barely allowed if the quantity obtained is in relation to:-

  1. Go away to anyplace inside India
  2. Anyplace in India after retirement from service or after the termination of his service

The next quantity is allowed to be claimed as LTA exemption:-

What number of occasions can LTA exemption be claimed?

The taxpayer can declare exemption in respect of any 2 journeys in a block of 4 years. The Revenue Tax Division has created block of 4 years every and in every block, the exemption may be claimed twice.

The block of years throughout which exemption may be claimed twice are:-

Block No. LTA Block Years
1st Block 1986-89
2nd Block 1990-93
3rd Block 1994-97
4th Block 1998-01
5th Block 2002-05
6th Block 2006-09
7th Block 2010-13
8th Block 2014-17
ninth Block 2018-21

In case a taxpayer has not been capable of declare each the exemption or has claimed just one exemption in a selected block, he can carry ahead the exemption of 1 journey to the subsequent 12 months.

Please notice that he can carry ahead the exemption of 1 journey solely to the subsequent 12 months and to not the subsequent block. For eg: If a taxpayer has solely claimed a single exemption within the 7th Block i.e. 2010-13, he can carry ahead this exemption to the subsequent 12 months i.e. 2014 and might declare this exemption solely within the 12 months 2014. The unique 2 exemptions for 2014-17 would additionally proceed to be there.

Different Related Factors relating to LTA

  1. In case the LTA is encashed with out performing the journey, no LTA Exemption can be allowed and your entire quantity obtained by the employer can be taxable.
  2. Household for this goal means the partner and a pair of kids of the worker. It additionally consists of dad and mom, brothers & sisters of the worker who’re wholly or primarily dependent upon him
  3. The exemption may be availed for the journey undertaken whereas on go away through the tenure of service and even after retirement/termination from service.
  4. It isn’t needed that the relations ought to carry out the journey together with the worker involved.
  5. LTA Exemption is barely accessible solely in respect of fare. Some other quantity obtained from the employer for the aim of boarding and lodging or for another goal is not going to qualify for deduction.

The Go away Journey Allowance (LTA)/Go away Journey Concession (LTC) quantity computed above is allowed as an exemption for earnings tax functions. Your employer could pay you a distinct quantity relying in your place within the organisation.

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