Valuation of Leave Travel Allowance (Sec.10(5) of Income Tax Act,1961) by M Anbarasu & B R Surya


All employees of the Assessee are eligible to claim this Exemption.

Value of Travel Concession or assistance received by an individual from his employer or former employer for himself and his family* in connection with the below proceedings shall be exempt.

a)      On leave to any place in India;

b)      To any place in India after retirement from service or after the termination of his service.

* “Family” means ’the spouse and children**; and parents, brothers and sisters of the individual wholly or mainly dependent on the individual’.

** “Children” means ‘Two surviving children of an individual excluding the children born before 1st October 1998 and also in case of multiple births after one child’

Number of Trips:-

  • 2 Journeys to be performed in a block of 4 Calendar Years (Current Block – 2010-2013)
  • When an individual does not avail such travel concession or assistance during any such block of Calendar years, the value of travel concession or assistance first availed during First Calendar years of the immediately succeeding block of 4 calendar years shall be eligible for exemption in lieu of the exemption not availed in the earlier block. (example: if an individual does not avail travel concession during the period 2010-2013, he can avail only one travel concession in the 1st calendar year of succeeding block i.e., in the year 2014)
  • This exemption shall be in addition to the exemption that will be available in respect of two journeys for the present block. Only one trip can be carried forward to be availed in the immediately succeeding block.

Quantum of Exemption:-

Journey performed by Amount of Exemption
1. Air Amount not exceeding the air economy fare of the national carrier by the shortest route to the place of destination , or the amount spent , whichever is less
2. Any other mode –

a) Where rail service is available

Amount not exceeding that air-conditioned first class rail fare by the shortest route to the place of destination , or the amount spent , whichever is less

b) Rail Service not available –

i) and recognized public transport system does not exist

An amount equivalent to the air conditioned 1st class rail fares for the distance by the shortest route as if the journey had been performed by rail. , or the amount spent , whichever is less

ii) but recognized public transport system exists An amount not exceeding the first class or deluxe class fare on such transport by the shortest route to the place of destination. , or the amount spent , whichever is less

Notes :-

Boarding , Lodging Charges for the Trip will not be allowed under this Concession.

Since this concession is available only for visit to any Place in India , trips to foreign countries will not be eligible for this exemption.

There is no discrimination in the Experience/Cadre of the employee for claiming this exemption. However the company can have its own policy for the same

This exemption is based on the actual expenditure. In other words, without performing the journey and incurring expenses thereon, no exemption can be claimed.

Exemption is available in respect of shortest route. Where the journey is performed by circuitous route, the exemption is limited to what is admissible by the shortest route. Likewise, where the journey is performed in ca circular form touching different places, the exemption will be limited to what is admissible for the journey from the place of origin to the farthest point reached, by the shortest route.

Fixed Allowance made to employees based on the declaration filed by them will not be eligible for exemption under this section.

The Block of years should be uniform for all employees irrespective of any fact.

5 thoughts on “Valuation of Leave Travel Allowance (Sec.10(5) of Income Tax Act,1961) by M Anbarasu & B R Surya”

  1. Sir, My employer not considered my travel tickets on LTA exemption. How can I claim exemption from I.Tax dept while filing Income tax return / refund from the dept.

  2. Usually, the Tax exemption in respect of all allowances shall be computed by the employer based on the documents and declarations submitted by the employees. LTA exemption shall also be computed and approved by the employee.

    The option available to you now is to claim the LTA while filing your returns accompanied by the respective exemption calculation duly certified by the employer.

  3. sir,

    i want a clarification on wording of sec 10(5) where it is mention———in point—-a) on leave to any place in india.

    whether it is mandatory to take leave from employer for claiming exemption of expenses on journey.
    or else i can also claim it in journey performed by me in Public Hoildays.

  4. What is mean by duly certified by employer ?
    do we need to get some certificate from employer ??
    If yeas, what are those documents ??

  5. Is LTC of the Government of India personnel [Government servants] is exempt from tax. In view of Sixth Pay Commission the employees are permitted to avail LTC on yearly basis for 8 years. I have read and
    understood that tax exemption is for two times LTC in block of four year u/s 10(5). What is the factual position in this regard.

    Thanks & regards

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