Lta exemption

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2012 Hi All,
I had traveled during December 11 through deluxe car from Delhi-Shimla-Delhi and paid Rs.48000/- towards taxi fare. Later on I claimed the same from my employer under LTA with taxi bill. My company allowed only Rs.5338/- as a non taxable LTA. According to them maximum allowability is Rs.3 per Km.

Can any one help me out as to what can be the maximum exemption amount under LTA? My LTA component in salary is Rs.48115/- and this was my first travel in current block of 4 years.

CA. Vikash Dwivedi

CA. Vikash Dwivedi (Expert)
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16 February 2012 dude you need to understand the basic idea behind the LTallowance under income tax act. The idea is to exempt two trips in the block of 4 yrs so as to provide ease to those who are wroking away from their home town it is no where intended to provide luxury trip. the LTA allowed is for the shortest route. If train/ Bus services are available then the LTA will be the fare for those conveyance. From Delhi to Shmla buses are abundantly available hence the LTA shall be allowed based on the Bus fare i.e on reasonable/ fair value.
hope you would understand the idea.
as such there is no Cap amount mentioned however ACt gives you the instance of allowance i.e maximum AC2 fare/ delux bus fare/ Air fare Economy class and for Shortest route on reasonable basis.

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