What is Leave Travel Allowance (LTA) ?
Leave Travel Allowance (LTA) is a benefit provided by employers to employees for covering travel expenses when they take a vacation or leave. LTA allows employees to claim reimbursement for the cost of travel (such as airfare, train fare, or bus fare) incurred during their leave.
The key features of LTA are:
Eligibility: Employees who have completed a specified period of service with the company are generally eligible to avail of LTA.
Tax Benefits: Under Indian tax laws, LTA is tax-exempt subject to certain conditions. Employees can claim tax deductions for travel expenses incurred for domestic travel. However, international travel is not eligible for LTA tax exemption.
Conditions: LTA is usually available for travel expenses incurred by employees and their family members. Employers may impose specific conditions, such as the travel being undertaken within India, and employees may need to submit relevant documents like travel tickets and bills for claiming the allowance.
Frequency: LTA is typically given once every year or every two years, depending on the company's policy.
In summary, LTA is a financial benefit that encourages employees to take vacations and provides them with a partial reimbursement for travel costs, which can also help reduce their taxable income.