Leave Travel Allowance is one of the best tax saving tools that an employee can avail. It is a tax exemption offered by employers to their employees.
Leave Travel Allowance as the name suggests is an allowance paid to the employee by the employer when the former is travelling with their family or alone. The amount paid as Leave Travel Allowance is tax free.
Given below is a list of expenses that is exempted under Leave Travel Allowance:
· Travel by air- Economic air fare by the shortest route or amount spent will be exempted depending on whichever is lesser.
· Travel by rail- A.C. first class fare by the shortest route or the amount spent on travel will be exempted depending on whichever is lesser.
Given below are the travel limitations applicable under Leave Travel Allowance.
· Leave Travel Allowance covers only domestic travel and does not cover international travel.
· The mode of travel should be either air travel, railway or public mode of transport.