Leave Travel Concession (LTC) is a tax-exempt benefit provided by employers in India to employees, allowing them to claim reimbursement for travel expenses incurred while on leave. Under this scheme, employees can travel within India—either alone or with family—and receive reimbursement for eligible travel costs, such as airfare, train tickets, or bus fares, subject to specific conditions.
LTC is governed by the Income Tax Act and is available to salaried employees. The exemption under LTC is allowed for two journeys in a block of four calendar years, as notified by the government. Importantly, this exemption applies only to the cost of travel (not hotel stays, meals, or local transportation) and is limited to the amount actually spent, within prescribed limits.
From a practical standpoint, LTC is relevant during income tax filing. Employees must submit proof of travel and comply with documentation requirements set by the employer. Businesses and HR teams often facilitate this process through internal policies and payroll systems. For employers, offering LTC is a valuable part of an employee benefits package, enhancing retention while aligning with income tax rules.
To stay updated on LTC provisions and related tax planning strategies, you can explore our income tax solutions at FinTax24.