Under Section 10(5) of the Leisure Travel Economics Act, 1961, LTA exempts the working population of India. Would you like to find a way how to reduce your tax liability and at the same time, set off for a vacation? And this applies across the board, except for actual ‘me too’ arrangements such as Leave Travel Allowance (LTA). LTA is one of the most sought-after tax exemptions offered by employers to their employees, basically availing themselves to save tax. Accountable and Responsible Managers travel expenses while on a vacation in India. In this article we will explain what is your LTA, what its process is, “How to claim LTA without travelling, Leave Travel Allowance Exemption Section, lta Exemption Limit for ay 2024-25” and some tips.
What is Leave Travel Allowance (LTA)?
This is the duty of the shareholders to provide the documentation an employee has given out salary to other members of the family. It is one of the forms of exemption in payment known as tax-free allowance. Where the quantum received in the form of LTA does not make the part of the taxable income of the employee. This facility is as far as two journeys in a period of four calendar years and the said period of 4 calendar years is 2022-2025.
How to claim LTA without travelling
LTC Cash Voucher Scheme extends the benefit of claiming the Leave Travel Allowance exemption limit to the employees without necessarily having to undertake any travel. Here is how the scheme works:
- If the employee buys goods or services from a GST-registered vendor. The said transaction should have a GST rate of not more than 12% at the standard rate.
- The acquisition is to be undertaken on, or prior to 31st March 2023, as the benefit of the scheme. It has been declared for the blocked period from 20182021.
- But exemption can be availed of only if the employee ✓ furnishes, to the employer valid invoices, indicating the expense and fund of payment of such invoices.
- The exemption is limited to the lower amount spent or ₹ 36,000/ ₹ 72,000 for two non-block years per person.
Eligibility Criteria for LTA Exemption
The following are the conditions that must be satisfied to claim a Leave Travel Allowance exemption limit:
- Travel must be within India.
- Amount of exemption shall be confined to the extent of actual expenditure on or allowance for that purpose. It does not include any amount received by the assessee from his employer for expenditure incurred by him for any such travel.
- It is allowed to employees, spouses, children dependent brothers and sisters, and parents of the employee.
- However, Benefit in this regard with respect to children can be claimed for two surviving children born after 01.10.1998.
- One has to submit documentary evidence of the journey performed per the set rules. Apart from that, tickets and declaration forms have to be submitted also.
Process to claim LTA
Exemption in Leave Travel Allowance can be claimed by the salaried employees provided they observe certain procedures. For instance,
- Submit a Claim: The employee must submit a claim to their employer, stating the amount of their eligible LTA discount and providing proof of travel expenses.
- Provide Necessary Documentation:To claim the LTA discount, the employee must give their employer the necessary documents like bills, boarding passes, and hotel bills.
- Use the Discount: The LTA discount can only be claimed if the employee has used it for travel within the state time limit.
- Proof of Leave: The employee must also provide proof of leave taken from work for travel to claim the LTA exemption.
- Time Limit: The LTA exemption can be claimed twice in a block of four calendar years, and any unused exemption cannot be carried forward.
How much LTA can be claimed?
LTA Claim Rules: The maximum amount eligible to be claimed as LTA is restricted to the actual amount spent on travel and the LTA received. Referring to an ET report, it says Rule 2B of the Income-tax Rules, 1962 (Rules). The tax-free value of perquisite regarding travel expenses in respect of LTA to an employee working in central government or state government or public sector. It will be determined only for journeys undertaken between the place of origin or base location by a trip on the shortest route.
Documents Needed for Claiming LTA
The whole process of claiming LTA can be accomplished smoothly provided you have the right documents. Any flaw or incorrect paperwork may render your claim liable to rejection.
- Proof of Travel: This will include tickets, boarding passes, or any other proof of travel in support of your claim.
- Invoice: This mainly applies to roadway travel. You may need to attach an invoice from a travel agency.
- Declaration: A declaration form that contains details of your travel, including dates and places visited.
Importance of Keeping Travel Records
It is very important to maintain proper records of your travels. The same would not only help claim LTA but also serve as proof in case the tax authorities take up your claim for verification.
- File Documents in Time: All the documents supporting travel should be submitted to the HR department before the due date.
- Keep Copies: Always keep a copy of your travel documents with you for future reference.
- Block Year: Verify whether your travel dates fall in the correct block year in which you are claiming this exemption.
Thus, by following the above guidelines, LTA claiming can be made quite smooth and time-saving.
Conclusion
LTA, or Leave Travel Allowance, is considered one of the most valued tax exemptions for a salaried person in this country. The LTC Cash Voucher Scheme will allow an alternative. It will let you enjoy the Leave Travel Allowance exemption limit without traveling. It is vital to understand the rules for tax exemptions. Only then can one claim the maximum tax benefits.
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