We have heard about tax deductions that can be claimed while filing ITR. For example, the premium paid for life insurance can be claimed as deductions to get tax benefits under section 80C. But there is one more term called “tax exemption”. These are provisions that allow the taxpayer to get exemption from paying taxes on that amount. Such provisions help the employers to plan a Cost to Company for the employees that is tax-efficient and can help in saving some money. One such widely known and used exemption is Leave Travel Allowance (LTA) and is also known as Leave Travel Concession (LTC).
What is LTA/LTC?
It is the allowance that is provided to the employees for travelling on leave. This allowance can only be claimed if certain conditions are met.
Conditions for claiming LTA
Eligibility
It only covers actual travel costs, including air, rail, and bus fare. Other expenses like accommodation, sightseeing, local conveyance etc., will not be covered.
Can we claim LTA on every vacation?
No! The LTA can be claimed for 2 journeys performed in a period of 4 years. But if anyone has not claimed on last eligible vacation, then it can be carried over to the next period of 4 years.
How to claim LTA?
The employee is required to submit proof of travel like travel tickets, boarding passes, relevant invoices, etc. The other guidelines may differ according to the organization.
Can we claim LTA exemption in the new tax regime?
Now a new optional tax regime has been introduced, and it is available for HUFs and individuals. It offers lower tax rates and fewer deductions/exemptions. Anyone who has chosen for this tax regime will not be eligible to claim exemptions like LTA, HRA, special allowances under section 10(14), and many more.
How to file ITR with a better saving option?
You should take the help of a professional in the process of tax filing for increasing your savings. You can contact Inside Tax for Income Tax Return (ITR) Filing Services in Delhi NCR or any other nearby place. We are an organization of experienced professionals who can share some tips to save extra under the current tax regime. You can contact us anytime and get your accounts audit and tax filed as soon as possible with precision.
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