Leave Travel Allowance Policy
Effective April 2020
Version Number 1:
Contents
LTA Policy
Objective…………………………………………………………………………………………………………2
Applicability……………………………………………………………………………………………………...2
Definition of LTA..……………………………………………………………………………………………….2
Conditions of Claiming LTA……………………………………………………………………………………2
Block Year……………………………………………………………………………………………………….2
Procedure to claim LTA………………………………………………………………………………………..3
Multi destination journey……………………………………………………………………………………….3
Eligible LTA exemption………………………………………………………………………………………3-4
Grade wise slabs of LTA……………………………………………………………………………………….5
Annexure – 1 ……………………………………………………………………………………………………6
CREATION DATE: 26th May 2020 LAST MODIFIED DATE: 26th May 2020
APPROVED DATE: 26th May 2020 EFFECTIIVE DATE: 1st April 2020
VERSION: AMS_LTA_1.0 CREATED BY: Human Resources, India
CUSTODIAN: Human Resources, India APPROVED BY:
1
1. Objective:
To extend possible tax benefit by giving option of LTA to the eligible employees as per the
Income Tax Act.
2. Applicability:
All employees (Probationers & Confirmed) who are eligible for LTA and tax benefit of the
same. In case of new joinees LTA will be treated on pro-rata basis.
3. Definition of Leave Travel Allowance (LTA)
Leave Travel Allowance is an optional component paid to employees in order to cover the
travelling expenses incurred by employees while on leave subject to certain conditions to be
fulfilled. Tax exemption under LTA
can be claimed twice in a block of four years.
4. Conditions for Claiming LTA
• Actual journey is a must to claim the exemption
• Employee needs to be on Privilege Leave (Sick leave can not be considered)
• Only domestic travel is considered for exemption i.e., travel within India. No
international travel is covered under LTA
• The exemption for travel is available for the employee alone or with his family, where
‘family’ includes the employee’s spouse, children and wholly or mainly dependent
parents.
• In case an employee has not availed exemption with respect to one or two journeys in
any of the block of 4 years, he is allowed to carryover such exemption to the next block
provided he avails this benefit, in the first calendar year of immediately succeeding block.
• No, LTA exemption is available for only two journeys performed in a block of four
calendar years.
5. Block Year
A block year is different from a financial year and is decided by the Government for LTA
exemption purposes. It comprises of 4 years each. The very first 4-year block commenced
from 1986. List of block years are 1986-1989, 1990-93, 1994-97, 1998-2001, 2002-05, 2006-
CREATION DATE: 26th May 2020 LAST MODIFIED DATE: 26th May 2020
APPROVED DATE: 26th May 2020 EFFECTIIVE DATE: 1st April 2020
VERSION: AMS_LTA_1.0 CREATED BY: Human Resources, India
CUSTODIAN: Human Resources, India APPROVED BY:
2
09, 2010-13 and so on. The block applicable for the current period is the calendar year 2018-
21. The previous block was the calendar year 2014-17.
6. Procedure to Claim LTA
Employee has to apply for leaves and need to travel during that time.
LTA can be claimed by the employees by submitting proof of travel such as:
• AMS LTA Claim Form ( Annexure - 1)
• Train tickets in case of journey performed by train
• Boarding pass and Air ticket in case of journey performed by Air
• Travel receipts, vouchers n bills if journey performed by road
• Leave approval on HR software.
7. Multi-Destination journey
Income tax provision provides exemption w.r.t travel cost incurred on leave to any place in
India. Conditions pertaining to the mode of transport also refers to the place of ‘origin’ to the
place of ‘destination’ and the route which must be the shortest available route.
Hence, if an employee is travelling to different places in a single vacation, the exemption can
only be availed for the travel cost eligible from the place of origin to the farthest place in the
vacation by the shortest possible route.
8. Eligible LTA Exemption
The exemption is available only on the actual travel costs i.e., the air, rail or bus fare incurred
by the employee. No expenses such as local conveyance, sightseeing, hotel accommodation,
food, etc., are eligible for this exemption. For example, if LTA granted by employer is Rs
30,000 and actual travel cost incurred by employee is Rs 20,000, exemption is available only
to the extent of Rs 20,000 and balance Rs 10,000 would be included in taxable salary income.
The exemption is also limited to LTA provided by the employer. For example, if LTA granted
by employer is Rs 30,000 and actual travel cost incurred by employee is Rs 40,000, exemption
is available only to the extent of Rs 30,000 and balance Rs 10,000 would not be considered
for exemption.
CREATION DATE: 26th May 2020 LAST MODIFIED DATE: 26th May 2020
APPROVED DATE: 26th May 2020 EFFECTIIVE DATE: 1st April 2020
VERSION: AMS_LTA_1.0 CREATED BY: Human Resources, India
CUSTODIAN: Human Resources, India APPROVED BY:
3
I. Exemption w.r.t various mode of transport.
Sr Scenario Eligible exemption
No
1 Journeys performed by rail The amount equivalent to the air-
conditioned first-class rail fare, for the
distance of the journey by the shortest
route.
2 Place of journey and destination are The amount equivalent to the air-
not connected by any recognized conditioned first-class rail fare, for the
public transport system distance of the journey by the shortest
route, as if the journey had been
performed by rail.
3 Place of journey and destination are The amount equivalent to the air-
not connected by rail (partly/fully) but conditioned first-class rail fare, for the
connected by other recognized public distance of the journey by the shortest
transport route, as if the journey had been
performed by rail.
4 Place of journey and destination are The amount spent for any mode of
connected by rail, but employee opts transport other than by air, restricted to
for other mode of transport other than air-conditioned first-class rail fare by the
air. shortest route to the place of
destination.
5 Journeys performed by air The amount is restricted to the air
economy fare of the national carrier
(Indian Airlines or Air India) by the
shortest route to the place of
destination.
CREATION DATE: 26th May 2020 LAST MODIFIED DATE: 26th May 2020
APPROVED DATE: 26th May 2020 EFFECTIIVE DATE: 1st April 2020
VERSION: AMS_LTA_1.0 CREATED BY: Human Resources, India
CUSTODIAN: Human Resources, India APPROVED BY:
4
9. Grade wise slabs of LTA
LTA will be applicable as per slab given below. LTA will be paid on monthly basis as a part of
Gross salary. The Special Allowance will be reduced by equivalent amount of LTA.
LTA Per Year Monthly Amt
Grade
Rs/- Rs/-
Assistant Manager 40000 3333
Manager/Sr.
60000 5000
Manager
Director/ HOD 80000 6667
E.g. If Manager opts for LTA, which is Rs. 60000/- PA.
60000/12 = 5000 PM
Rs.5000 /- will be reduced from existing special allowance and will get added in LTA
Allowance on monthly basis.
CREATION DATE: 26th May 2020 LAST MODIFIED DATE: 26th May 2020
APPROVED DATE: 26th May 2020 EFFECTIIVE DATE: 1st April 2020
VERSION: AMS_LTA_1.0 CREATED BY: Human Resources, India
CUSTODIAN: Human Resources, India APPROVED BY:
5
ANNEXURE - 1
LTA CLAIM FORM
Mode of Travel
Emp Code (Air/Train/Car)
Total No. of Persons
Emp Name Travelled
Department LTA Block Year
Total Expenditure
Designation Incurred on Fare
Date of Travel Place of Travel
From
To
Details of Dependent family Members
Sr. No Name Relation Age
1 Self
2 Spouse
3 Child 1
4 Child 2
5 Parent 1
6 Parent 2
Important Note: * Please attach original travel tickets & bills applicable as per
the LTA Policy.
I hereby certify and confirm that I,.................................... will be availing the tax benefit as per the Income
Tax laws applicable for claiming LTA reimbursements and that my spouse has not and will not be claiming
any such reimbursements or tax benefit for the said block period.
Signature of Employee:
CREATION DATE: 26th May 2020 LAST MODIFIED DATE: 26th May 2020
APPROVED DATE: 26th May 2020 EFFECTIIVE DATE: 1st April 2020
VERSION: AMS_LTA_1.0 CREATED BY: Human Resources, India
CUSTODIAN: Human Resources, India APPROVED BY:
