Hi
I am working as HR administrator. Now company wants to add 'Leave Travell Allowance' component in CTC for employee. Please guide.
CA Gyati Gupta
(In Practice)
(8227 Points)
Replied 13 October 2016
Different types of allowance are given to employees such as house rent allowance (HRA), leave travel allowance (LTA), dearness allowance, convince allowance, city compensation allowance and children's education allowance which become part of CTC.
However, LTA is tax free;Section 10(5) read with Rule 2B provides for exemption and outlines the conditions subject to which LTA is exempt.
LTA is exempt for travel only in India, in respect of two children only, deduction allowed only upto the actual expenditure, and in respect of two journeys carried in the block of 4 yrs; currently the block is from 2014-2017.
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