Leave Travel Allowance: Wondering how to save on taxes before the end of the financial year? Consider claiming the Leave Travel Allowance (LTA). With the pandemic situation improving, companies are once again offering LTA to their employees to cover the cost of travel within the country. This allows the employee to claim tax exemption on the travel ticket expenses for themselves, their spouse, up to two children, parents, and dependent siblings.
It's important to note that LTA tax exemption is not available every year, and it can only be claimed twice in a block of four years. Additionally, the exemption only covers the cost of travel tickets, including train, plane, or road tickets, and does not include other expenses incurred during the journey.
It's a great way to save on taxes while enjoying a holiday with your loved ones. However, it's important to plan ahead and ensure that the expenses claimed under LTA fall within the limits set by the company and the Income Tax Act, 1961. International travel expenses are not eligible for tax exemption through LTA.
If both spouses are employed, they can alternate claiming LTA tax exemption every year. To claim LTA, employees need to submit travel proof to their employer, such as ticket copies and travel receipts.
If you're planning a vacation within India, consider asking your employer about LTA to save on taxes. It's a valuable benefit that can help you take a much-needed break while also reducing your tax burden. Just make sure to plan ahead and follow the guidelines to ensure a smooth and hassle-free process.
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