Recently you might have noticed that few PSU employees misused the Leave Travel Concession (LTC) component of their salary by claiming in a wrong way. So let us first understand what is Leave Travel Concession (LTC) and how to get the claims.
Leave Travel Concession (LTC) is nothing but a type of salary component where your employer is providing some yearly benefit to travel with your family. Usually it is mentioned as yearly component but will be paid on monthly wise. This facility will be availed to only “Family” members. Family meaning for this purpose includes spouse and children. The point to be noted that if you have more than two children then you can claim for up to only two children, not more than that. It also includes brothers, sisters and parents who are wholly or mainly dependent upon the employee. Below are the few features which you must understand it.
Taxability-
Suppose Mr.X is entitled for the yearly LTC of Rs.50,000 and he joined the company on 1st June 2012 (Financial Year 2012-13) and he took journey in the month of December 2012. But according to LTC yearly applicability, this journey will be considered for the year 2012 but not for 2013. Because LTC will be considered on yearly base starting from 1st January of a year to 31st Decemeber of a year ending. It is not same like Financial Year (1st April to 31st March). Usually LTC can be availed twice in a block of a four calendar years. Current block of years will be as below.
2002-2005 (From 1st January 2002 to 31st December 2005)
2006-2009 (From 1st January 2006 to 31st December 2009)
2010-2013 (From 1st January 2010 to 31st December 2013)
2014-2017 (From 1st January 2014 to 31st December 2017).
As said above you can claim only twice in a block of 4 years period. If you claimed twice in a block then the remaining concession will be taxable income as per your slab. But if not at all claimed on a block or claimed only once then you can carry forward the remaining facility to immediate next block. In such a case excluding the previous carry forward you are again entitled to travel twice in a block of that presiding year. Suppose Mr.X claimed only once in the block of 2010-13 then he can carry forward the remaining one travel to immediate next block i.e. 2014-017. So in the block of 2014-17 he will be totally entitled for 3 travels.
Conditions to allow LTC–
1) If journey is performed by Air-Amount of economy class air fare of the national carried by the shortest route or the amount spent, whichever is less.
This is where PSU’s few employees manipulated. Instead of claiming for shortest route they claimed as per their wish. Which costed Government exchequer a lot.
2) If journey is performed by Rail-Amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less.
3) If origin of journey and destination are connected by rail but journey is performed by any other mode of transport-Amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less.
4) If origin of journey and destination are not connected by rail-
5) Exemption will be based on the actual expenses-Suppose Mr.X is entitled for Rs.50,000 LTC but if he claimed Rs.40,000 as expenses then he will be entitled for Rs.40,000 LTC. Also at the same time if he claimed LTC for Rs.60,000 then he will be entitled only for Rs.50,000.
6) Exemption is available on in respect of fare-It strictly includes only air fare, rail fare or bus fare. It will not include an such expenses like boarding or lodging expenses or taxi charges.
7) Fare for more than 2 children-If kids are born before 1st October 1998 then they are all eligible for travel irrespective of number. But kids who born after 1st October 1998 then only two kids will be allowed to travel. So if Mr.X has 3 kids born before 1st October 1998 and 3 kids after 1st October 1998 then he can claim expenses for all kids born before 1st October 1998 but only for two kids who born after 1st October 1998.
8) If you travel two times in a single year then you can claim both in the same year.
9) You must be on earned/annual leave during the period of travel. So your travel during holidays will not be considered as LTC.
10) If husband and wife both are working and entitled for LTA then both can’t claim for the same trave.
Proof of travel-It is not obligatory part to submit proof !!! Yes recent judgements on this issue clearly mentioned that it is employer’s wish to ask for proof and verify it. But your employer have right to ask for the proof. Remember when your employer file LTC to income tax department then the assessing officer can ask the proof not to the employer but to the employee !!!
Hence it is always advisable to have proper proof before going to submit LTC (whether your employer asking for it or not). Because at the end you are answerable to Income Tax Department but not your employer.
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View Comments
Sir,
The LTC Claim applied by employee for Wife, Twin Daughters whose date of Birth is 07.07.2001(BOTH TWINS) and for Son(DOB is 04.06.2007) How to settle the claim, claim can be given to both twins and Son. please reply sir.
Dear Dee,
I have already answered your questions. Please refer the above post again.
Dear Sir,
Plan to visit Havelock Island on LTC. Hq is Delhi. Onwards Journey: Delhi to Port Blair
Backwards: Port Blair to Hyderabad to Goa to Delhi. Pl clarify:
1. if I the backwards airfare will be reimbursed (restricting it to Port Blair-Delhi fare)
2. if the ferry charges from Port Blair to Havelock Island will be reimbursed.
Grateful for prompt guidance!
Many thanks & Regards,
Dear Mohan,
I can search routes and maps to confirm. Better you discuss this with your employer.
Dear Sir,
I would like to inquire about my eligibility for LTC (Leave Travel Concession) benefits. I have one child from my first delivery and twins from my second delivery. Could you please advise if I qualify for LTC benefits in this situation?
Thank you for your attention to this matter.
Dear Solanki,
Sadly NO.
Hi
Recently I availed LTC (All India) for Andaman's for the block of 2018-22. I booked my air ticket through IRCTC prior to 14 days rather the 21 days. I took leave encashment and did not drawn advance.
Now, while settling LTC bills competent authority has turned down my claim stating that I have not booked air tickets prior to 21 days, hence did not fulfill the condition of point IV of the OM. No. 31011/12/202-E-IV dated 29.08.2022. I have been asked to remit the leave encashment drawn.
Please provide your opinion.
Dear Rakesh,
They are right.
what is the gap period inbetween one home town and one all india LTC
Dear Jayalakshmi,
I don't think there is any such restrictions.
Sir,
if a Cental govt. servant has three children-
1. daughter - 35yrs old - married
2. daughter - 30 yrs old - unmarried - salaried
3. son -22yrs old -student
Can he apply ltc for his son (3rd child) ???
Der PD,
Can you refer above post again?
I retired from central govt office and before retirement i availed ltc for me, wife and depandant son. My ltc sanctioned and i submitted my ltc bill and office cleared the bill. After one year of retirement my office enquiring about my depandant son. I explained them he was dependant on me till my retirement. Is not harrassment to a retired employee?
Dear Sudesh,
It is hard to say.
Sir ..I m working in central government ,and my husband is in PSU.I want to avail LTC of me and my husband. Sir pl tell me the process ..to avail LTC.Is there any written document is required to avail
Dear Khushbu,
Approach the employer.
Sir I have availed 2020-21hometown ltc against special ltc scheme can I avail all india ltc 2018-21 in extended till 2022 my employer told me you can't avail ltc two ltc in last two year whats the actual rules of it because my employer is self confused
Dear Hemant,
This point I have already shared in the above post.
Hi sir,
Is there any minimum gap between two LTCs to be maintained. Suppose i took one on 15th December 2022. Can i take another in March 2023.
Thanks.
Dear Vivek,
There is no such restrictions.