POSTED BY February 20, 2009 COMMENTS (228)ON
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.
As the name suggests, LTA i.e Leave Travel Allowance is an allowance that an employee receives form his employer for his traveling expenses while he/she is on leave. This allowance is given only for the domestic traveling, international traveling is not covered in this allowance.
There are normally two situations when employee gets this allowance :
#1. Employee receives this allowance while traveling alone or with family or dependents from his current employer.
#2. Employee receives this allowance while traveling alone or with family or dependents from his former employer after retirement or termination of job.
It is the benefit given to a salaried employee and you can claim travel expenses from any one journey in a year. Lets see some important features of this allowance:
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 didn’t 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 don’t claim it, you will have to pay tax on this part .
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 : Utilizing 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 …