Income Tax Saving Tips: The last date for filing ITR is 31st July. If you have not filed an ITR yet, then here we are going to tell you about the benefits. If you are employed, then LTA must have also been mentioned in your salary package. LTA means Leave Travel Allowance. Only those who are employed and who are given leave travel allowance by their employer get the benefit of LTA.
The amount of leave travel allowance is determined by the HR and Finance department of your company according to your rank and position. If both husband and wife are in a job, then it is a big benefit. If you have not yet taken advantage of tax exemption on LTA, then you can take it now. However, some rules are also associated with LTA. Understand these rules here-
When does one get the benefit of LTA?
The money received as LTA is tax-free. To get this tax-free money, it is necessary that you first take leave from your office and then go somewhere in the country to travel alone or with family. In LTA, you can claim the maximum amount given by the employer or the expenses incurred on travel, whichever is less.
There are some conditions regarding travel.
For tax exemption on LTA, you can include only the expenses of those travels that are done within the boundaries of India. The expenses of foreign travel are not included in it.
At the time you are including the expenses of the travel for LTA, you must be on leave from the company and this leave should be mentioned in the company's records.
In LTA, you can include the expenses of traveling with yourself, your life partner, and two children. Apart from this, your dependent siblings or parents can also be included.
In LTA, you can include the expenses of rail travel, air travel, bus travel, etc. i.e. the fare of any government or other recognized transport. Expenses of a private car, cab, food, accommodation, and sightseeing cannot be included in it.
If you are on a business trip and have taken your spouse and child along with you, then you will not get the benefit of LTA.
Husband and wife will get more benefits in this way.
You cannot avail of tax exemption on LTA every year, tax exemption can be availed twice in 4 years. For this, the Income Tax Department has already fixed blocks of four years each. But if both you and your wife are working and both are given the facility of LTA by their company, then the family can travel every year and both of you can get tax-free money every year for all the calendar years.
Also, understand this thing in the case of tax exemption on LTA.
If for some reason you are not able to avail of tax exemption in the respective block, then you can avail it in the next block. For example, if for some reason you are unable to claim LTA for the block of 2020-2023, then it can be carried forward to the first year of the block starting from 2024. But, you will have to take this type of tax exemption in the first year of the next block.
One more thing to understand about tax is that if the employer has given you LTA up to 1 lakh, but your travel expenses are Rs 50 thousand, then the exemption will be available only for Rs 50 thousand. If your expenditure is Rs 1.2 lakh, then the exemption amount will be Rs 1 lakh.
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