As we are in mid Feb of the year and its tax time , i thought to talk a bit on LTA and Medical reimbursement benefits .Though many of you might already know about it , let me go over it in brief for readers who have less knowledge about it .
You have a limit up to which you can claim your spent amount on LTA and medical bills and save tax on that part . If you dint claim it, for that much amount you will be taxed .
Limit for LTA : 50,000 per year
Limit for Medical Bills : Rs 15,000 per year
So from your total salary , you can save tax on this 65000 if you want , if you dont claim it , you will have to pay tax on this part .
What is LTA ?
LTA is Leave Travel allowance , is the benefit given to a salaried employee . You can claim travel expenses from any one journey in a year .
- There is a block of 4 yrs decided by govt ( current block is 2006-2009) . In a block you can claim LTA any two years . for other 2 yrs you cant claim it , so total 50,000 will be taxable in those 2 yrs .
- You can carry 1 LTA claim for next block , which you have to claim in the first year of next block .
- You cant claim LTA 2 times in a year .
- These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
- If your LTA is not utilised, it gets added to your salary and you will be taxed on it.
- LTA covers travel for yourself and your family. Family, in this case, includes yourself, parents, siblings dependent on you, spouse (even if your spouse is working) and children.
- The entire cost of the holiday is not covered. Only the travel costs are covered. So, whether you fly, hop on to a train or take public transport, you will have to show the ticket to claim your LTA. This means you will need to keep your air, rail or public transport ticket.
You can also claim deductions on the medical bills for medicines and doctor visits . You just have to get the bills and submit a proofs .
The bills can be in the name of you or your dependents .
Final Note : Utilising this benefit just requires you to keep the documents ready . many people do not claim this benefit because they are too lazy of keep the documents safe . Don’t be lazy …