Jan 21, 2011

Money Teaser #6: Funny thoughts about LTA

Last night I lay in bed looking up at the stars in the sky, and I thought to myself, "where the heck is the ceiling?"

—Scott Adams (Dilbert)

The MQ Money Teaser #6 is about the various questions you think about while trying to understand and navigate your way through the complex maze of tax provisions concerning the claiming of LTA / LTC from your employer. There are too many misgivings about the mysterious tax regulations regarding filing a claim for Leave Travel Concession / Allowance. So this money teaser should resolve all your LTA / LTC tax exemptions queries:


1. Why only travel expenses are allowed for LTA tax exemption? Why hotel stay expenses are not covered?
By implication, there is no need to stay; come back the same day. Anyway, if you would really like to stay and tour the place, there are
and Night Shelters meant for the purpose; for your food needs, enjoy langar in a Gurdwara.

2. What is the minimum no. of days leave required to avail the LTA tax benefit?
As tax laws are silent about the leave, I think even half- day leave will suffice.

3. Shouldn’t the LTA (Leave Travel Allowance)be replaced with VTA (Virtual Travel Allowance) which will be more in tune with the realities of this digital age?
Very correct! Moreover, nobody has time to avail leaves due to hectic work schedules (half the working time gets spent in Social Media); availing PL/EL also results in indirect loss of earned leave encashment benefit; also government should be encouraging savings instead of spending. I think we should ask for another revision to DTC so that this proposal can be incorporated in it.

4. Why foreign travel is not allowed?
Tax Rules have been designed to preserve India’s precious foreign exchange reserves.

5. Why only two childrens are allowed?
Good question! See this is unique initiative by the Indian government: Population control through fiscal incentives. Before the introduction of this measure, people were producing children like cats and dogs just to claim more LTC benefit; now couples are forced to think twice before going for the third child so as not to lose their LTC tax exemption.

6. Can I avail medical leave instead of PL/ EL?
Yes, nobody can stop a sick man from travelling…it is a violation of fundamental right enshrined in Article 420 of the constitution …file a PIL in the Supreme Court.

7. How to know whether my Parents are dependent upon me?
Sorry, don’t know; May be you get a certificate from the Chartered Accountant.

8. Why ‘shortest route’?
This is as per the directive of ministry of environment so that people limit their travel to a single place…it’s our duty to conserve the environment.

9. I lost my boarding pass; while trying to claim LTC on the basis of Air Tickets, my company is not accepting my claim.What should I do now?
File a FIR report; attach a FIR copy plus an affidavit along with your LTA claim. If your employer still refuses, go to a labour court. Remember one thing: If you also claim mobile reimbursement from your employer, please don’t submit your mobile bill for the period of leave travel.Don’t ask me why?

10. Now that Supreme Court has exempted organizations for collecting proof of travel, why my company still insists on submission of travel bills for LTA Claims?
Old habits die hard!Moreover, by hurting you, the poor accounting chap is trying to get some illusion of power and ego nourishment, so you should not mind…just try to get a bit friendly with him.

11. Why the provisions regarding claiming tax exemption of LTA/ LTC are so complex?
When this whole universe is complex—Do you know abut black holes?— isn’t it naïve of you to expect simple tax laws? Just imagine the efforts put in by the Draftsman while writing the secret tax code.

12. I’m having a live-in relationship…so whether the definition of family under section 10(5)of Income Tax Act, 1961 includes live-in partner?
Sorry, don't know…why don’t you ask a tax expert??

13. I’m a Gay …can I also have a family?
Please excuse me!

I think the discussion is going too far…before it gets too close, it is better to wrap it up!

LTA Tax Planning Tips

1. Avail medical leave – half day will do—instead of wasting your PL/EL for tax purposes.

2. If you’re planning for 3 kids, there’s a way out; as per the rules, children born out of multiple births after the first child are treated as ‘one child’ only…so while planning your second child, plan for twins or triplets. Now please don’t ask me how to conceive twins…try googling!

Please no more questions?? Opinion is welcome!

There is nothing so stupid as the educated man if you get him off the thing he was educated in.

—Will Rogers

Also see:

1. Money Teaser # 5: Income Tax
2. Money Teaser # 5 Answers
3. Money Teaser # 4: Financial Crisis


  1. ha ha ha.... made for a nice read. the last quote too..


  2. Thank you Mr. Patachitram!

    You know, it’s almost 24 hours since I published the post and there was not a single comment...may be my readers are all serious guys and don’t like funny stuff...i too started getting serious...now feeling relaxed to see someone out there who really appreciates humour.

  3. Good Humorous take on a complex topic.

    Overall a great effort by you Fisher. Have gained a lot of knowledge on various topics through your blog.

    Keep up the good work!!

  4. What a fun read! Totally loved it

  5. nice read. very funny

  6. i deal with LTA claims in my organisation and i daily face such stupid questions ...............now i have got a ready reference guide .........thanks buddy

  7. nice article and that quote at the last is a very serious quote !!!


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