- LTA exemption can be taken only once in a year and twice in a block of 4 years.
- If you have not availed LTA in one block, exemptions can be carried forward to the next block of 4 years. The only condition in this case is that the exemption has to be availed in the very first year of this subsequent block.
- Blocks are pre-defined by government as below – (these are calendar year and not financial year)
- 2002 – 2005
- 2006 – 2009
- 2010 – 2013
- 2014 – 2017
- 2018 – 2021
- Eligible only if you are travelling with :
- Spouse
- up to 2 children
- The allowance is restricted to two children born on or after October 1, 1998. The only exception for this is if after the birth of the first child, the second conception results in multiple births (twins or triplets).
- There is no restriction on the number of children born before this date.
- Dependent parents, brothers and sisters
- Not eligible if you are not travelling along with family. If for some reason you are travelling alone, you can claim travel charges only for yourself. In case you are coming back with them, you can claim travel exp for all of them for return trip.
- If you are not accompanying your family in either part of travel, you can’t claim exemption for tickets of your family for that portion. For example if you are not coming back with your parents, you can’t claim exemption of your parent’s tickets. However, you can claim your ticket.
- Only the cost of travel is allowed. Hotel expense, boarding expenses etc., are not allowed.
- You must make sure to opt for the shortest possible route, only then can you claim expenses.
- LTA can’t be claimed twice (by husband & wife both) for single journey.
- There is also a restriction on the fare component. Tax exemption can only be claimed for economy class air fare, first class AC rail fare or first/deluxe class bus fare. However in the absence of public transport, you can hire a taxi or rent a car and claim for expenses equivalent to first class AC rail fare.
- Proof - Tickets like – railway ticket and Airlines ticket( with boarding pass) is valid proof for claiming LTA benefit
- LTA benefits are available only for travel in India. Overseas travel is not exempt.
- To and fro journey will be consider as one journey from LTA point of view.
- No matter in which financial year you have booked tickets, you can only claim LTA exemption in the year you actually performed travel.
- Train fare, bus fare & air fare all are allowed for LTA exemption.
- You can’t claim LTA deduction if you are getting it monthly. It has to be in allowance form.
- If you are crossing financial years during travel, you can claim exemption in the year in which you started your journey. For example, trip duration is 25 Mar till 4 April. You can claim exemption in financial year ending 31st March.
- There is no maximum limit of LTA claim. It is limited to amount of LTA given by employer.
- Husband and Wife both can get benefit of LTA exemption. They are eligible for four journeys in a block of 4 years. Two for each.
- Rented car with a driver is eligible for LTA, however rented car with self-drive is not.
About the Author: Manoj Harchandani is a certified TRP (Tax Return Preparer), authorized by Income Tax Department, Government of India. He is a tax planner and investment advisor. If you need ITR filing assistance, tax advice, tax saving tips, short term/ long term investment advice, please write him at manojh.trp@gmail.com
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