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Salaried individuals, eager to maximise their tax savings, are reminded of the impending deadline—March 31st—to submit essential proofs to their employers for availing Leave Travel Allowance (LTA) exemptions. This deadline looms as claiming LTA through Income Tax Return (ITR) filings can be a cumbersome process.
While filing ITR might seem like a viable option to claim deductions, experts caution against it, citing potential complications. ‘It is easier to claim certain exemptions through your employers to avoid hassles and save time,’ emphasises a tax expert.
LTA, an integral part of many salary structures, covers travel expenses during vacations, including those incurred for family members. However, to claim this benefit, employees must adhere to specific deadlines and provide documentary evidence of their travel expenses.
Explaining LTA eligibility criteria, tax experts state, ‘An employed person with LTA specified in their salary structure may claim an exemption under Section 10(5) of the Income-tax Act, 1961.’
Employees can avail LTA exemptions for any two years within a four-year block. However, the claim amount cannot surpass the actual expenditure or the LTA provided by the employer.
Both private and government employees are eligible for LTA exemptions, albeit with varying procedures. Private sector employees typically claim LTA against an allowance, while government employees may have additional conditions.
The process to claim LTA involves submitting evidence of expenditure, such as tickets and boarding passes, to the employer. ‘Valid proofs need to be submitted once the investment proof collection windows are opened,’ explains a tax consultant.
While employees can still claim LTA while filing their ITR, experts advise against it due to potential challenges. Failure to submit proof to employers may lead to higher TDS deductions, and claiming LTA directly through ITR could attract scrutiny from tax authorities.
‘Processing LTA claims through employers is advisable, as they verify all documents before passing your claim, ensuring compliance,’ suggests a tax advisor.
As the deadline approaches, salaried individuals are urged to promptly submit their tax-saving proofs to avail of LTA exemptions and streamline their tax filings.
