Question: I am a salaried employee with the Leave Travel Allowance (LTA) as part of my salary structure. I am planning a trip to Kerala during the Christmas and New Year holidays. Can I claim tax benefits under LTA for my flight and stay expenses? If yes, could you please let me know the necessary documents I need to submit to my employer for claiming this benefit?

Response given by CA (Dr.) Suresh Surana: For an employee receiving Leave Travel Allowance (LTA) as part of the salary structure, you may be eligible to claim exemptions as specified under the Income Tax Act, 1961 (referred to as the “IT Act”), if you have opted for the old tax regime. These exemptions are subject to certain conditions.

Section 10(5) of the I-T Act outlines the exemptions available to salaried employees in relation to LTA w.r.t. travel to any place in India. Exemption under this section is applicable only for the expenses directly related to flight costs incurred during travel. Please note that the exemption does not extend to other travel-related expenses, such as accommodation / stay or refreshment expenses during the journey.

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In accordance with Rule 2B of the Income Tax Rules, 1962, where the journey is undertaken by flight, the exemption that can be claimed for travel expenses is limited to an amount not exceeding the economy class air fare of the national carrier for the shortest route to the destination. This applies to both the employee and their family members. It is important to note that this benefit can be availed for a maximum of two journeys within a block of four calendar years. The current block period is from 1 January 2022 to 31 December 2025.

In this case, the employee may claim the benefit, provided that the benefit has not been claimed more than once during the period from 1 January 2022 to 31 December 2025. Additionally, the employee must furnish proof of travel to their employer. Acceptable forms of Proof of Travel include, but are not limited to, flight tickets, boarding passes, and travel invoices.

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