leave travel allowance & Leave encashment

A). LTA

Exemption is available only on the actual travel costs incurred by the employee. No expenses such as local conveyance, sightseeing, hotel accommodation, food etc are eligible for exemption. Exemption is also limited to LTA provided by the employer.

B).Leave encash

​​​It is taxable if received while in service. Leave encashment received at the time of retirement is exempt in the hands of the Government employee.In the hands of non-Government employee leave encashment will be exempt subject to the limit prescribed in this behalf under the Income-tax Law.​