FAQs - Reimbursements

Allotment is company restricted and exemption amount (Rs.15,000/-) is Government restricted. A company can allot any amount but the government restriction for exemption is Rs.15,000/-.
 

The travel must be a straight and direct travel from one place to another place only. The shortest route for travel is accepted. There is a condition that, one claim must be for going to the home town.
 

It must be traveled through Flight/Train/Bus. Maximum is First class flight ticket charges.
 

 If the claim is provided with the bills, it is exempted. Otherwise it is taxable, although it is with in the limit of the allotment. As per the Government rule, along with the bills, prescriptions must be submitted.

WHAT ARE THE LIMITS OF EXEMPTION IN L.T.C. is granted to an employee in connection with the journey on leave by him or his family. It is exempt from income tax within certain limits as under : -

(a) Where journey is performed by rail; railway-fare in Second AC class by shortest route to destination.
(b) Where places of origin and destination are connected by rail but the journey is performed by any other mode then Second AC class fare by shortest route to the place of destination.
(c) Where place of origin of journey and destination, or part thereof, are not connected by rail and journey is performed by any other transport; then

(i) If a recognized public transport system exists between such places the first class or deluxe class fare of such transport by shortest route, or,
(ii) If in other case, Second AC class fare for the distance of the journey by the shortest route, as if the journey has been performed by rail.

Exemption will, in no case exceed actual expenditure incurred in the performance of journey.
Leave Travel Concession Rules have been amended on the recommendation of the Fifth Pay Commission to extend the facility of travel by air economy Y- Class to certain categories of employees of the Central Government with effect from 1st October, 1997.

Consequently, where the journey is performed on or after 1st October, 1997 by air, an amount not exceeding the air economy fare of the National Carrier by the shortest route to the place of destination.

Also, where the entitlement was previously for air-conditioned Second Class Rail fare, it has been upgraded to air-conditioned First Class Rail fare.

The assessee can claim exemption in respect of two such journey(s) in a block of 4 years. For this purpose, the first block of 4 years was calendar year 1986-89. For a block of 4 years, the journey performed in the first year following that block year is also eligible for exemption. Also, such journey will not be taken into account for determining the tax exemption for the succeeding block.
 

Yes, certainty. In case the L.T.C. is encashed without actually performing the journey the entire amount received by the employee would be taxed in his hands.
 

For this purpose "family" means:-
(i) The spouse and children of the individual; and
(ii) The parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual.
 

Yes. Exemption of L.T.C. shall not be available to more than two surviving children of an individual after 1 st October 1998. However, this shall not apply in respect of children born before 1.10.98 and also in case of multiple births after one child. If an employee has before 1.10.98 even five children or more, exemption would still be available to all children. However, if an employee begets a third child after 1.10.1998, the L.T.C. for the third child will not be exempt.