Hi,
Current LTA bracket is 2006-2009 so as per that can we carry forward LTA of 2006 , 2007 & 2008 till the last year ie 2009 and can take all together in 2009.
Will appreciate your prompt response.
Regds,
Pushpa
From India, Mumbai
Current LTA bracket is 2006-2009 so as per that can we carry forward LTA of 2006 , 2007 & 2008 till the last year ie 2009 and can take all together in 2009.
Will appreciate your prompt response.
Regds,
Pushpa
From India, Mumbai
Hi Pushpa,
Am not very sure what you are asking about but...
As far as I know:
1. LTA cannot be carried forward to another financial year.
2. If it has not been claimed in the current financial year, then the employer has to give the LTA amount and it is taxable.
3. LTA can be taxed only twice in the 4 year slab.
Please correct me if I am wrong....
Regrds,
Chanchal
From India, Mumbai
2Am not very sure what you are asking about but...
As far as I know:
1. LTA cannot be carried forward to another financial year.
2. If it has not been claimed in the current financial year, then the employer has to give the LTA amount and it is taxable.
3. LTA can be taxed only twice in the 4 year slab.
Please correct me if I am wrong....
Regrds,
Chanchal
From India, Mumbai
Hi Chanchal, Thnx for your revert, still I confused because our consultant is saying LTA can be c/f for two years. May be it is upto company own policy to administrate LTA. Regds, Pushpa
From India, Mumbai
From India, Mumbai
Basically, it is a monetary benefit that you get on the expenses you incur when you travel.
i. You should have taken leave from your company
ii. You should actually travel
You can either travel alone or with your family. However, if your family travels without you, no LTA can be claimed.
2. How often can I claim LTA?
Twice in the block of four calendar years.
This block is not calculated with the start of your employment. The government defines these blocks.
The current block is 2006-09: January 2006 to December 2009. Since it is the calendar year and not the financial year, it will be from January 1, 2006 to December 31, 2009.
3. What if I fail to avail of it?
In case you fail to do so, there is a carry over option.
Let's say that in the block of four years, you never did claim any LTA.
You can do so in the first year of the next block of four years.
4. What is the proof of travel to avail of LTA?
According to rule 2B, you can produce an air, rail or any public transport ticket.
You can even submit the bills issued by the car rental company if you rent a vehicle.
However, the travel is applicable anywhere in India and not abroad. So an international air ticket will not hold.
5. Is LTA taxed?
You can receive LTA as either reimbursement or allowance.
Reimbursement
In case of LTA as reimbursement, it is not taxable.
Let's say your company offers an LTA of Rs 50,000. For proof of travel, you produce an air ticket of Rs 10,000.
In such a case, you can claim only Rs 10,000 as LTA and it will be exempt from tax.
Allowance
If you do not submit any proof of travel, you will get your LTA but will have to pay tax on it.
If you produce proof of travel, it will not be taxable to the extent your proof of travel is covered.
Let's say you are entitled to Rs 50,000 as LTA as part of your salary. Since you produced proof of travel as Rs 10,000, you will not be taxed on this amount. However you will be taxed on the net Rs 40,000 as per your income tax slab rate.
LTA is not a fringe benefit as the latter are benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.
6. Can both spouses claim LTA?
If both spouses are getting the LTA benefit in their places of work, they can both claim exemption on LTA from their employers and the benefit for four journeys in one block.
They do not have to take the precaution of not travelling twice during the same year.
Moreover, they can take the same family members or different ones as long as they stick to the definition of the members for this purpose.
Family includes spouse, children as well as dependent parents, brothers and sisters. In respect of children born on or after October 1, 1998, the exemption will be restricted only to two surviving children unless the birth after one child has resulted in multiple births (twins or triplets).
7. If I and my wife travel this year, can we both claim LTA simultaneously?
No. You cannot claim LTA twice for the same journey. If both of you take a holiday together and you claim LTA, she cannot.
8. If I am entitled to a particular amount as LTA, but my expenses are higher, can I claim more?
Say in the year 2005-06, you receive on Rs 8,000 as LTA, but spend Rs 50,000 on travel. You can claim exemption only to the tune of Rs 8,000.
__________________________________________________ ___________
Leave Travel Allowance is actually a rather simple tax-saving benefit that covers your holiday expenses.
Here, we give you a low-down on LTA.
What's covered?
Only the travel costs, not the eating and partying or hotel bills.
So, whether you fly, hop on to a train or take public transport, you can show the ticket and claim your LTA.
What if you want to travel by a car? If a car is owned by a central government organisation like ITDC, the state government or the local body, LTA is permitted.
If you could not get public transport and resorted to private transport, try and get a bill. If the bill is not accepted by your employer, you can always file an income tax return, claim an exemption and get a refund.
How often can you claim it?
Twice in a block of four calendar years.
In case you were unaware, 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 2006-09: January 2006 to December 2009.
The earlier one was from 2002-05: January 2002 to December 2005.
During this time period, a person is entitled to two LTA claims.
A person can get an income tax exemption for two journeys in a block of four calendar years. But he can make a trip only once in year.
No time for a holiday?
Then you can carry it forward.
One LTA can be brought forward and claimed in the first year of next block.
Let's say you do not take your LTA in 2002-05. Or that you use only one LTA. This means you will be able to take the pending LTA in 2006. This means that, in the 2006-09 block, you will be totally entitled to the three journeys.
And if you switch jobs? You can get the LTA not only from present organisation but also from the former employer, if the concession is lying unutilised.
Let's say that, in the 2002-05 block, you claimed LTA in 2003. In 2004 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.
Who's covered?
Your family. This term is quite wide; it includes yourself, parents, siblings dependent on you, spouse 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).
Well, what if your spouse is also employed? It does not matter, your spouse too is covered.
What if you don't take it?
If LTA is not utilised, it gets added to the entire salary. And then you are taxed on it.
Let's say you and spouse are both employed and both have LTA as part of the salary package. Your LTA is Rs 20,000 and hers is Rs 20,000 too.
Both of you and your child go for a holiday. The tickets for the three of you amount to Rs 15,000. You supply the tickets to your office and this amount will be eligible for a tax deduction, the balance Rs 5,000 will be taxed. You can claim exemption only to the tune of your expenditure.
Now, if you claim this, your wife will not be able to claim this same holiday from her employer. Her Rs 20,000 will be taxed. Unless another holiday is made and she claims it.
Or, let's say that you spend Rs 30,000 on tickets but your LTA is just Rs 20,000. You can claim up to Rs 20,000 and tell your wife to claim her ticket from her employer.
So go and catch that plane or hop onto a train. Not only is a holiday good for health but can also be a tax haven.
Quick tips
i. You can get LTA only if you have applied for leave from your company and have actually travelled.
ii. If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself. If claiming for family, you should travel with them.
iii. You will need to keep your air, rail or public transport ticket. Or, if you rented a car, give the bill issued by the car rental company.
iv. International travel is not valid. It must be within the country.
v. 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, if you make two trips in a year, you lose one. A way out is to claim one and make your spouse claim the other.
From India
i. You should have taken leave from your company
ii. You should actually travel
You can either travel alone or with your family. However, if your family travels without you, no LTA can be claimed.
2. How often can I claim LTA?
Twice in the block of four calendar years.
This block is not calculated with the start of your employment. The government defines these blocks.
The current block is 2006-09: January 2006 to December 2009. Since it is the calendar year and not the financial year, it will be from January 1, 2006 to December 31, 2009.
3. What if I fail to avail of it?
In case you fail to do so, there is a carry over option.
Let's say that in the block of four years, you never did claim any LTA.
You can do so in the first year of the next block of four years.
4. What is the proof of travel to avail of LTA?
According to rule 2B, you can produce an air, rail or any public transport ticket.
You can even submit the bills issued by the car rental company if you rent a vehicle.
However, the travel is applicable anywhere in India and not abroad. So an international air ticket will not hold.
5. Is LTA taxed?
You can receive LTA as either reimbursement or allowance.
Reimbursement
In case of LTA as reimbursement, it is not taxable.
Let's say your company offers an LTA of Rs 50,000. For proof of travel, you produce an air ticket of Rs 10,000.
In such a case, you can claim only Rs 10,000 as LTA and it will be exempt from tax.
Allowance
If you do not submit any proof of travel, you will get your LTA but will have to pay tax on it.
If you produce proof of travel, it will not be taxable to the extent your proof of travel is covered.
Let's say you are entitled to Rs 50,000 as LTA as part of your salary. Since you produced proof of travel as Rs 10,000, you will not be taxed on this amount. However you will be taxed on the net Rs 40,000 as per your income tax slab rate.
LTA is not a fringe benefit as the latter are benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.
6. Can both spouses claim LTA?
If both spouses are getting the LTA benefit in their places of work, they can both claim exemption on LTA from their employers and the benefit for four journeys in one block.
They do not have to take the precaution of not travelling twice during the same year.
Moreover, they can take the same family members or different ones as long as they stick to the definition of the members for this purpose.
Family includes spouse, children as well as dependent parents, brothers and sisters. In respect of children born on or after October 1, 1998, the exemption will be restricted only to two surviving children unless the birth after one child has resulted in multiple births (twins or triplets).
7. If I and my wife travel this year, can we both claim LTA simultaneously?
No. You cannot claim LTA twice for the same journey. If both of you take a holiday together and you claim LTA, she cannot.
8. If I am entitled to a particular amount as LTA, but my expenses are higher, can I claim more?
Say in the year 2005-06, you receive on Rs 8,000 as LTA, but spend Rs 50,000 on travel. You can claim exemption only to the tune of Rs 8,000.
__________________________________________________ ___________
Leave Travel Allowance is actually a rather simple tax-saving benefit that covers your holiday expenses.
Here, we give you a low-down on LTA.
What's covered?
Only the travel costs, not the eating and partying or hotel bills.
So, whether you fly, hop on to a train or take public transport, you can show the ticket and claim your LTA.
What if you want to travel by a car? If a car is owned by a central government organisation like ITDC, the state government or the local body, LTA is permitted.
If you could not get public transport and resorted to private transport, try and get a bill. If the bill is not accepted by your employer, you can always file an income tax return, claim an exemption and get a refund.
How often can you claim it?
Twice in a block of four calendar years.
In case you were unaware, 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 2006-09: January 2006 to December 2009.
The earlier one was from 2002-05: January 2002 to December 2005.
During this time period, a person is entitled to two LTA claims.
A person can get an income tax exemption for two journeys in a block of four calendar years. But he can make a trip only once in year.
No time for a holiday?
Then you can carry it forward.
One LTA can be brought forward and claimed in the first year of next block.
Let's say you do not take your LTA in 2002-05. Or that you use only one LTA. This means you will be able to take the pending LTA in 2006. This means that, in the 2006-09 block, you will be totally entitled to the three journeys.
And if you switch jobs? You can get the LTA not only from present organisation but also from the former employer, if the concession is lying unutilised.
Let's say that, in the 2002-05 block, you claimed LTA in 2003. In 2004 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.
Who's covered?
Your family. This term is quite wide; it includes yourself, parents, siblings dependent on you, spouse 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).
Well, what if your spouse is also employed? It does not matter, your spouse too is covered.
What if you don't take it?
If LTA is not utilised, it gets added to the entire salary. And then you are taxed on it.
Let's say you and spouse are both employed and both have LTA as part of the salary package. Your LTA is Rs 20,000 and hers is Rs 20,000 too.
Both of you and your child go for a holiday. The tickets for the three of you amount to Rs 15,000. You supply the tickets to your office and this amount will be eligible for a tax deduction, the balance Rs 5,000 will be taxed. You can claim exemption only to the tune of your expenditure.
Now, if you claim this, your wife will not be able to claim this same holiday from her employer. Her Rs 20,000 will be taxed. Unless another holiday is made and she claims it.
Or, let's say that you spend Rs 30,000 on tickets but your LTA is just Rs 20,000. You can claim up to Rs 20,000 and tell your wife to claim her ticket from her employer.
So go and catch that plane or hop onto a train. Not only is a holiday good for health but can also be a tax haven.
Quick tips
i. You can get LTA only if you have applied for leave from your company and have actually travelled.
ii. If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself. If claiming for family, you should travel with them.
iii. You will need to keep your air, rail or public transport ticket. Or, if you rented a car, give the bill issued by the car rental company.
iv. International travel is not valid. It must be within the country.
v. 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, if you make two trips in a year, you lose one. A way out is to claim one and make your spouse claim the other.
From India
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LTA (REDIFF).doc