HJS:
Tax Planning – LTA (Leave Travel Allowance)
LTA, Leave Travel Allowance, is one of the tax saving component of an individual's salary structure. LTA is the amount given/claimed by an employee from their employer. Under some special consideration the LTA is considered to be as a tax relief component.
As per Income Tax Law under section 10, if an employee goes for vacation for a minimum period of 5 days along with his/her family then he/she is eligible to claim the LTA and this amount is exempted from the Tax. This claim is valid for tax relief only if the travel is done in India and not outside India.
For getting the claim for LTA the travel documents proof must be genuine and limited to travel in India only, then only under section 10 you can claim for LTA. To get tax exemption the employee has to submit the original tickets. The claim can be made only for the tickets and not on the food or the hotel accommodation or site seeing.
LTA can be claimed starting from calendar year 1986 to every 4 calendar years bracket travel. And only 2 travels should be claimed for a block of 4 years for eligible for LTA claim. The current calendar year bracket is 2006-2009. If the employee receives LTA amount on self declaration basis then it is not valid for the tax exemption. If an employee does not claim LTA for a block of 4 years, then it can be carried over. The LTA can be claimed in the first year of the 4 year of a calendar year.