Ltc -for income tax calculation

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Leave Travel Allowance (LTC) encashment and allowance are generally taxable. However, LTC reimbursement is typically not taxable once in a four-year block. If you wish to claim LTC exemptions, it's crucial to opt for the old tax regime, as the new tax regime makes LTC taxable even with valid journey tickets.

ntc pioneer

ntc pioneer (Querist)

13 February 2024 Is ltc encashment taxable ?
Is ltc allowance taxable ?
Is ltc reimbursement taxable ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 February 2024 LTC encashment taxable.
LTC allowance taxable.
LTC reimbursement not taxable once in 4 years.

ntc pioneer

ntc pioneer (Querist)

13 February 2024 Thank you sir

Plz clarify the taxability of ltc reimbursement in case of the following illustration

Block 2020-21
Amount claimed and reimbursed as LTC-30000

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 February 2024 In a block of 4 years one home town reimbursement and one all India tour reimbursement is allowed.

Under the new tax regime, LTC/LTA is taxable for employees even if you produce journey tickets. So, if you want to claim LTC/LTA exemption, you will need to choose the old tax regime. If you choose the new tax regime, you will not be able to claim LTC exemption, even if you produce journey tickets.

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