Leave Travel Concession (LTC) is a benefit offered to government employees in India, enabling them to travel with their families and claim the expenses as a tax-free allowance**. Let’s explore what is leave travel concession or LTC, its benefits, and how it integrates with other financial products such as life insurance plans and investment plans.
What is Leave Travel Concession?
Often abbreviated as LTC, Leave Travel Concession is a tax-saving** measure under the Income Tax Act of India. It allows employees to travel domestically and claim a tax deduction on their travel expenses. The primary objective of LTC is to encourage for employees to take time off for travel and leisure, ensuring a balanced work-life environment.
Here are some of the key features of LTC.
Tax Benefits:
Under Section 10(5) of the Income Tax Act, the reimbursement for travel expenses can be claimed as tax-free.
Eligibility:
Employees can claim LTC for themselves and their eligible family members, including spouses, children, and dependent parents or siblings.
Frequency:
Employees can claim LTC benefits twice in a block of four calendar years.
How to Claim LTC?**
To claim LTC, employees must provide proof of travel, such as tickets and boarding passes. The travel expenses covered include transportation via air, rail, or road. However, accommodation and food expenses are not included in the tax exemption.
Here is how you can claim LTC.
Ensure your travel period falls within the designated block years.
Collect all relevant travel documents and submit them to your employer.
While filing your annual tax return, claim the exemption under Section 10(5).
Integration with Other Financial Products
LTC can be effectively combined with other financial products, such as life insurance plans or investment products, to optimise tax benefits** and ensure financial security.
Here are a couple of options to consider.
Is a pure risk cover plan providing a high sum assured at low premiums. By combining LTC with a term insurance plan, employees can optimise their tax savings while securing their family’s future.
Unit Linked Insurance Plans (ULIPs) offer the dual benefits of investment and insurance. Employees can invest in a ULIP-based policy to grow their wealth over time while also availing the tax benefits under LTC.
Leave Travel Concession is a valuable benefit that not only encourages employees to take periodic breaks but also provides significant tax advantages. By understanding what is leave travel concession and strategically integrating it with financial products such as life insurance plans, employees can optimise their financial planning and ensure a secure future for their families.
Disclaimers:
** Tax exemptions are as per applicable tax laws from time to time.
Unit Linked Insurance Products are different from the traditional insurance products and are subject to risk factors. The Premium paid in unit-linked life insurance policies are subject to investment risks associated with capital markets and NAVs of the units may go up or down, based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. IndiaFirst Life Insurance Company Limited is only name of the Insurance Company and does not in any way indicate the quality of the contract, its future prospects, or returns. Please know the associated risks and the applicable charges from your Insurance Agent or the Intermediary or policy document issued by the Insurance Company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale.
IndiaFirst Life Insurance Company Limited, IRDAI Regn No.:143, CIN: U66010MH2008PLC183679, Address: 12th & 13th floor, North [C] Wing, Tower 4, Nesco IT Park, Nesco Center, Western Express Highway, Goregaon (East), Mumbai – 400 063. Toll-free No – 18002098700. Email Id:customer.first@indiafirstlife.com, Website: www.indiafirstlife.com, Fax No. +91226570600. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Trade logo displayed above belongs to our promoter M/s Bank of Baroda and is used by IndiaFirst Life Insurance Co. Ltd. under license.
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. IndiaFirst Life Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and IndiaFirst Life and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
Under no circumstances, including but not limited to negligence, shall IndiaFirst Life or its directors or employees be liable for any special or consequential damages that are alleged to have resulted from the use and/or inability to use this site or information contained within, even if IndiaFirst Life and/or its employees or directors have been notified of the possibilities of potential damages or losses.
Customers 
Distributor 
Employee 
