Is LTA tax-free if I travel abroad or book via a travel website? My company offers LTA as part of my CTC, and I booked a family trip through an online portal. Can I claim tax exemption if the travel was within India but booked online? What if I had taken an overseas trip?

Ans: LTCG upto 1 lac continues to be exempted under the New Tax Regime but LTC allowance is not available. (Disclaimer : The views given are personal. Please consult your CA or Tax Consultant before acting on my views)

Ans: Under the new tax regime, LTC/LTA is taxable for employees even if you produce journey tickets.
So, if you want to claim LTC/LTA exemption, you will need to choose the old tax regime. If you choose the new tax regime, you will not be able to claim LTC exemption, even if you produce journey tickets.

Here are some additional things to keep in mind:
• The new tax regime has lower tax rates than the old tax regime. So, even though you cannot claim LTC/LTA exemption under the new tax regime, you may still end up paying less tax overall.
• There are any number of calculators available online including on the Income Tax Dept website which can give you an idea of which regime is beneficial for you in different scenarios.

Ans: Leave Travel Allowance deduction is not allowed under new tax regime.

Ans: If she claims LTA as reimbursement then it can be exempted. For claiming LTA exempt, it can be done once every 2 years and she needs to be absent from work for a week continuously.

Please take your CAs advice before moving ahead.

Ans: Yes, the LTCG exemption limit has been raised to Rs 1.25 lakhs. This means that if your total income includes long-term capital gains (LTCG), the first Rs 1.25 lakhs of those gains will be exempt from tax. So, even if your total income is Rs 10 lakhs, you can still claim this exemption on LTCG.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in