Exemption of income tax on salary can be claimed u/s 10(5) of the I T Act for the money received on account of Leave Travel Assistance . Therefore, employees receiveing LTC or LTA must know following eight points related to it , take the most benefit out of section 10(15) .
1. The assessee can claim exemption in respect of any two journeys in a block of 4 years. Current block is Calendar years 2010-2013 and previous block was 2006-09.2. If the assessee has not availed of the exemption of LTC in a particular block, he can claim the exemption of first journey in the calendar year immediately succeeding the end of the block of four calendar years.Such journey undertaken during the extended period will not be taken into account for determining the tax exemption of two journeys for the succeeding block.3. The exemption relating to LTC shall not be available to more that two surviving children of an individual after 01.10.1998.However ,this rule will not apply in respect of children born before 01.10.1998 and also in case of multiple birth after one child.4. The meaning of family for the purpose of LTC is spouse , children of the employee, parents, brothers & sister of the employee, who are wholly or mainly dependent upon him.5. Family members can perform separate journey.6. The the journey for LTC can be undertaken while on leave during the tenure of service or even after retirement/termination from service.7. Exemption is available in respect of shortest route.8. Exemption under LTC is for fare only for railways- airc-conditioned rail fare,economy class air fare, or first class or deluxe class fare of recognised public transport system , if the origin and destinataion is not connected with rail..
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