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Travel Blog
24 Oct 2024
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As a salaried individual, there are various tax benefits that you enjoy. As they are deductions, they reduce your taxable income. On the other hand, the other tax benefit which is exemption is usually not included in the taxable income. Tax exemptions such as house rent allowance, encashing leaves and exemption on gratuity can be taken advantage of by the salaried class. One such tax exemption is the leave travel allowance (LTA). Do remember that tax benefits are subject to change in tax laws What is LTA? How can you benefit from the leave travel allowance exemption? Here is more information for you.
Leave travel allowance is an allowance that is given to an employee by their employer. For example, your employer has approved a travel allowance of Rs.40,000 for a trip you are planning to take with your family. However, your travel expense is Rs.25,000, and the additional cost of stay and other expenses come up to a total of Rs.35,000. As the LTA covers only the travelling expenses, your employer would reimburse you only for the travel expenses incurred. Other expenses are not covered under the LTA.
The leave travel concession which is offered by your employer is eligible for tax exemption. As it is part of your salary, it is eligible for tax exemption under Section 10(5) of the Income Tax Act. Due to the LTA exemption, the LTA is disbursed as a part of your income.
You need to meet the following criteria to claim this exemption:
* Standard T&C Apply
If you wish to claim the exemption, your employer might ask for the following documents:
Documents related to other expenses such that of food and shopping are not accepted as these are considered personal costs.
LTA is available to all employees, whether in the public or private sector, without any mandatory waiting period after joining an organization. The eligibility criteria, coverage amount, and terms are set by the employer and are often included in the final settlement during exit formalities.
This exemption has two benefits: it reimburses you for the cost of travelling covered by you and the travel cost is exempted under it. This allows you to save money and tax. As your partner and family are also covered under it, the added cost is also reimbursed to you.
Keep in mind the following things:
Travel insurance not only provides financial coverage for your luggage, but also provides medical coverage if you were to fall sick during your travel. *
When you are planning a trip with your family, you would want the experience just like you want to it be. However, it is difficult to anticipate when an emergency might take place. Loss of baggage or travel document, suddenly falling sick or being struck by a calamity are some of the incidences that you might not be able to predict. Having domestic travel insurance can be beneficial. Its benefits include:
If you are planning to take a leave and travel somewhere, do keep in mind about this exemption. Make sure you purchase domestic travel insurance before you commence your travel to enjoy the financial protection you and your loved ones deserve. * Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale. *Standard T&C apply
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