Leave Travel Tax Benefits

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There are leave travel benefit concessions that are available for a salaried employee. It is important that the conditions related to the Leave Travel concession and its eligibility for a deduction is considered carefully. This will ensure that the individual is able to plan their trip and then the benefits are taken into their tax calculations which will result in a benefit at the end of the day. Here is a look at some of the main conditions related to the leave travel benefit.

 

Nature of receipt

The first thing to consider is the fact that the employer provides an employee with the leave travel benefit in their salary structure. The amount has to be given under this specific head and it cannot be given as some other head but then be considered as a leave travel and then benefits taken on this income.

 

Under the normal working of a payment to a salaried employee this will be taxable however if there is some amount that can be considered as being tax free according to the workings then this will be reduced from the amount received and the net figure would be the amount that would be taxable. The tax benefit can be taken twice is a block of four years. This period of 4 years is decided by the tax authorities so the salaried individual has to look at that specific time period and then make their decisions about how they will go about the process. The current block is from 2010 to 2013 which covers the period January 1, 2010 to December 31, 2013. This is important for the current year because if the benefit has not been taken then it should be used by the end of December.

 

Leave benefit also for his family

One point that is important as far as the overall tax benefit is concerned is that the tax benefit is available for the individual who is salaried and is also extended to his family who is travelling with him. This means that the expense on the tickets of his entire family would be available as a deduction. The key part here is the definition of a family and the good part is that the term here is quite wide. On one side it includes the spouse as well as children of the individual salaried so this is quite clear. However only 2 children are covered for the benefits. There is however an addition to the list and this will include parents, brothers and sisters of the individual or any one of them.

 

The addition of the other close members of the family will be possible only when they are wholly or mainly dependent on the individual. The test of dependence is very important especially when it comes to the parents and siblings so this needs to be kept in mind when the planning is being undertaken.

Any place in India

The most important component of the entire exercise is that the benefit is available only when the leave is for going to any place in India. This clearly means that international travel will not get the same benefits as the travel within the country. The exemption is restricted to the actual expenses included on air fare, rail fare or bus fare only. Other expenses like scooter or taxi charges or even staying expenses at the place where the travel has been taken would not be covered. The exemption is however allowable only for the shortest route to the place visited in India. This means that the individual has to be careful about the manner in which this is taking place and hence only tickets for Indian destinations would be eligible.

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