InvestorQ : What if my LTA is rejected by the company for the financial year? How can I claim the same?
ishika Banerjee made post

What if my LTA is rejected by the company for the financial year? How can I claim the same?

vani Patil answered.
8 months ago
Leave Travel Allowance (LTA) is an allowance type that is provided by the employer to his employee who is traveling on leave from work to cover his travel expenses. LTA is an important component of the salary of the employee as it is eligible for income tax exemption as per the Income Tax Act, 1961. Section 10(5) of the Income Tax Act provides a deduction for leave travel allowance (commonly known as LTA) based on the submission of proof of travel and related expenses, subject to some specified requirements. 

You need to understand why your claim was rejected by the company. Given below are the conditions you need to fulfill to claim LTA:

  • LTA can only be claimed on actual travel costs. All the mediums of travel i.e road, rail, or air are claimable under LTA. However, the employee must submit valid proof of cost to claim the leave travel allowance.
  • LTA can be claimed only on the travel expense. Food or stay or any such expenses excluding travel cannot be a part of it.
  • LTA can only be claimed on domestic travel expenses. You cannot claim LTA on the expenses incurred during the international trip (if any) of the employee.
It should be noted that the employee cannot claim LTA in every financial year. LTA can be claimed only for two journeys in a block of 4 years. The block years for the LTA purposes are decided by the government. The current running block for claiming LTA is calendar years 2018-2021. The last running block was 2014-17. As the LTA can only be claimed when the employee has been on leave from work for traveling purposes, the employee should mark that period as ‘leave’.

If your company doesn’t accept your LTA, look at the reason for the same. If it is just an error in your application, you can reapply.  If it is because you didn’t fulfill the conditions required for claiming LTA, then the amount will be added to your taxable income. If it is eligible for LTA, then yes. You can claim it while filing your taxes.