Loading page
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
An allowance towards the cost of travel within India while on leave, exempt under Section 10(5) of the Income-tax Act for the actual fare on the shortest route, under the old tax regime. The exemption can be claimed for a limited number of journeys in each block of years, so payroll needs travel proof and a record of which block each claim falls in.
LTA work clusters around the investment proof window near the end of the financial year, when employees submit tickets and boarding passes for journeys they want treated as exempt. Payroll checks that the journey was within India, that the travelling family members qualify, and that the block has not already been used up.
Example: an employee with ₹40,000 of LTA in the salary structure submits a train fare of ₹28,000 for a family trip. Only the fare actually spent on the eligible route is considered for exemption under the old regime, and the remaining ₹12,000 stays taxable.
A frequent error is accepting hotel bills or local sightseeing costs as LTA proof. Another is forgetting that an employee who has opted for the new tax regime gets no LTA exemption at all, so the whole amount is taxed as salary.
Only the fare for travel within India by the shortest route, for the employee and eligible family members. Hotel, food and local sightseeing costs are not covered.
Two journeys in a block of four calendar years, under section 10(5) and the related rule. One unused journey can be carried into the first year of the next block.
No. The LTA exemption is available only under the old regime. Under the new regime the amount paid is taxable like other salary.
Tickets or boarding passes and proof of payment for the journey, with the travel dates and the family members who travelled. The claim should be raised in the financial year the journey was made.
14-day free trial · Full access to all 12 modules · Zero implementation fee · Cancel anytime