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Replied on
05 Aug 2013 06:06 PM IST
1. You can get LTA only if you have applied for leave from your company and have actually travelled. However, international travel is not valid. You must have travelled within the country.
2. The entire cost of the holiday is not covered. Only the travel costs are covered. So, whether you fly, hop 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 organisation 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. 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).
If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself or, if claiming for your family, you should travel with them.
5. LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
The current block is 2010-13 -- 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 2006-09. Or that you use only one LTA. Don't worry, you will be able to take the pending LTA in 20010. This means that, in the 2010-13 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 organisation but also from your former employer, if the concession is lying unutilised.
Let's say that, in the 2006-09 block, you claimed LTA in 2010. In 2008, 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. 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
10. If your LTA is not utilised, it gets added to your salary and you will be taxed on it.
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