LTA Claim - Must know things

Leave Travel Allowance (aka LTA) affects every salaried employee. In the start I got a lot of confusion too, but after doing a little research I found some information, which may be helpful for you as well. Let me first tell you in brief, then I'll try to explain in detail.

• LTA is always from Jan 1st to 31st Dec . So current block is Jan 1 , 2010 - 31st Dec 2013
• You can claim 2 journey's in 4 yrs block.
• You can claim LTA just one time in a year. So if there are two journey's, You can claim just one . The best thing to do is that you claim one and other your Wife :)
• If somehow you have not utilized your 2 claims in a year, You can carry forward 1 LTA claim to next Block and have to utilize it in the First year of next Block . So all the people who have any Claim remaining after 2009 , they can claim one extra in next block of 2010-2013 (Total 3, 1 in the first year for sure)
  

Also do remember, By saying LTA claim duration for a year is an 1st to 31st Dec doesn't mean you need to claim it before 31st Dec. You can claim it till 10th March (or before, check with your HR).


Now there are some more rules (yes many more) about LTA, which I'm trying to summarizing here:

1. You can get LTA only if you have applied for leave from your company (like minimum 3 leaves in my company) and have actually traveled. However, international travel is not valid. You must have traveled within the country.
2. Only the travel costs (not entire holiday cost) are covered. So, whether you fly, hope on to a train or take public transport, you will have to show the ticket to claim your LTA. This means you will need to keep your air, rail or public transport ticket.
3. If you travel by car and it is owned by a central government organization like ITDC, the state government or the local body, then LTA is permitted. If you could not get public transport and resorted to private transport like renting a car, get a bill issued by the rental company. If the bill is not accepted by your employer, you can always file an income tax return, claim an exemption and get a refund.
4. LTA covers travel for yourself and your family accompanied by you (of course). Family, in this case, includes yourself, parents, siblings dependent on you, spouse (even if your spouse is working) and children. For children born after October 1, 1998, the exemption is restricted to only two surviving children (unless, of course, one birth has resulted in multiple children like twins and triplets).
5. LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are calendar years (January 1 to December 31). The current block is 2010-2013 (January 2010 to December 2013). The earlier one was from 2006-09 (January 2006 to December 2009). During this time period, a person is entitled to two LTA claims.
6. Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year. So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year. If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other.
7. You can carry forward your LTA. One LTA can be brought forward and claimed in the first year of the next block. Let's say you do not take your LTA in 2002-05. Or that you use only one LTA. Don't worry, you will be able to take the pending LTA in 2006. This means that, in the 2006-09 block, you will be totally entitled to the three journeys.
8. If you switch jobs, you can get the LTA not only from your present organization but also from your former employer, if the concession is lying non-utilized. Let's say that, in the 2002-05 block, you claimed LTA in 2003. In 2004, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.
9. If your LTA is not utilized, it gets added to your salary and you will be taxed on it. Let's say you and your spouse are both employed and both have LTA as part of the salary package. Your LTA is Rs 20,000 and hers is Rs 20,000 too. Both of you and your child go for a holiday. The tickets for the three of you amount to Rs 15,000. You supply the tickets to your office and this amount will be eligible for a tax deduction; the balance Rs 5,000 will be taxed. You can claim exemption only to the tune of your expenditure. If you claim this, your spouse will not be able to claim this same holiday from her employer. His/ Her Rs 20,000 will be taxed. Unless, of course, you go for another holiday and he/ she claims it. Or, let's say, you spend Rs 30,000 on tickets but your LTA is just Rs 20,000. You can claim up to Rs 20,000 and tell your spouse to claim his/ her ticket from his/ her employer.
10. You must take the shortest route to your destination to be eligible for LTA. Let's say you are going from Delhi to Mumbai on a holiday. So the cost of your travel from Delhi to Mumbai and Mumbai to Delhi will be eligible for LTA. If you decide to go to Mumbai via Agra, Jhansi and Itarsi, your LTA from Delhi to Agra will be covered. But Agra to Mumbai will not be covered.
    

Let's take another scenario. You traveled from Mumbai -- Kerala -- Delhi -- Mumbai.
If you take a direct connection, you will be eligible for LTA. Mumbai -- Kerala -- Delhi -- Mumbai: LTA covered
But if you throw in Hyderabad, then it goes out of gear.

Mumbai -- Thiruvananthapuram: LTA covered
Thiruvananthapuram -- Hyderabad -- Delhi: LTA not covered
Delhi -- Mumbai: LTA covered