Financial Literacy News: Salaried individuals typically need to give proof of their expenses and investments to get tax deductions under the Income-tax Act. One common tax exemption available to salaried individuals is the Leave Travel Allowance or LTA. Leave Travel Allowance (LTA), often included in your salary, pays for your vacation travel expenses. It also covers travel costs for family members such as spouses, children (up to two if born on or after October 1, 1998), dependent parents, and dependent siblings.
LTA, usually a component of your salary, covers the expenses of your travel during vacation. The cost incurred for family members who travel with an employees is also allowed as exemption. To claim LTA, the employee typically needs to submit documentary evidence of the incurred travel expenditure to the employers within specific deadlines.
Updated Mar 11, 2021 | 07:01 IST
The tax benefit on LTA can be claimed on two journeys in a block of four years. The current block is 2018-21 Carry forward LTA or opt for cash voucher scheme: Know which is more beneficial
New Delhi: Due to COVID-19, employees have been avoiding travel and hence been unable to avail the benefit of LTC in the current block of 2018-21. Therefore, the government came out with the leave travel concession (LTC) cash voucher scheme in October last year in order to allow people to claim tax benefits they otherwise would not have been able to claim due to travel restrictions. Under this scheme, employees can claim tax deduction on LTC by spending the money on buying goods and services instead of submitting travel bills. The scheme was initially launched for government sector employees, but was later extended to non-government employees as well.