Leave Travel Allowance Definition
Leave travel allowance, in simpler words, is a type of allowance which is included in an employee’s salary package. It typically covers travel expenses incurred during a leave.
As an HR manager, you may have often received queries and questions from employees about leave travel allowance or LTA.
LTA, undoubtedly, is one of the most vital parts of financial planning for all working individuals not just because it pays their travel expenses but also gives tax benefits. Let’s dive in and explore everything about LTA so that you can clear the doubts of your employees without any delay.
Here, we will discover:
What is Leave Travel Allowance?
Leave travel allowance, usually abbreviated as LTA, is an allowance that companies provide to their staff to cover their expenses related to any travel. Mostly, companies give this allowance once a year to their employees. It is a crucial part of an employee’s CTC.
The best thing about leave travel allowance is that it is sometimes not taxed. Now that you know the meaning of LTA, let’s understand who can claim this allowance in the next section.
Who Can Claim Leave Travel Allowance?
Here are some factors that make an employee eligible to claim a leave travel allowance:
- Leave travel allowance is claimed on the actual expense of the travel. Plus, the mediums used by the employee throughout the travel, be it road or air, are claimed under this allowance. Needless to say, the employee has to provide the necessary proof of expenses to claim them.
- The employee can only get his or her travel expenses reimbursed. It doesn’t include money spent on things like food, housing, or travel.
- Under the LTA, employees can only get reimbursement for domestic transport costs.
- Please keep in mind that the employee is not allowed to file an LTA claim during the entire calendar year. It is only possible to file an LTA claim for two trips in a four-year time.
- Since the employee can only claim the LTA after having been away from work for travel, they should say that they were on leave during that time.
Procedure to Claim LTA
Most of the time, the way to file a claim for LTA depends on the workplace. Each company sets a different deadline. Employers may also ask workers to show proof of their travel, like tickets, boarding passes, travel agent invoices, and other things, along with the necessary declaration. This is the reason why companies advise employees to always keep copies of the documents related to their travel.
Mostly, employees submit their travel documents to the respective departments and then do the rest of the process from their end. In a traditional setup where everything is done manually, claiming and managing LTA becomes time-consuming as well as tedious. As a result, companies are shifting to HR software lately to make things super faster and easier.
That’s everything you need to know about leave travel allowance. Now that you have a clear understanding of this concept, we hope you will never find difficulty in addressing employee queries related to LTA.
FAQs
1. What is the LTA in salary?
The full form of LTA is a leave travel allowance. It is mostly part of an employee’s CTC. LTA, in layman’s terms, covers the overall expenses related to an employee’s work-related trip. While some companies provide LTA once a year, others provide it every two to four years.
2. How is LTA calculated in CTC?
Calculating LTA, or leave travel allowance in CTA is not that difficult. Say, for instance, if an organization pays an employee 30,000 rupees as LTA and the actual cost of the trip is 20,000 rupees, then the employee will only be able to claim 20,000 rupees as an exemption. The other 10,000 rupees will be added to their taxable pay income.
3. Is LTA part of CTC?
The LTA is actually part of your pay, so it is automatically added to your account every time you get paid. As long as you don’t travel or have valid proof that you did travel, you can’t use the LTA you got to get a tax break.