Most dangerous words in financial world

Please check the following words before you invest, if they are there think twice before investing

  1. Offshore
  2. The opportunity of a lifetime
  3. Prime bank
  4. This baby’s gonna move
  5. Guaranteed
  6. You need to hurry
  7. It’s a sure thing
  8. Our proprietary computer model
  9. The smart money is buying it
  10. Option strategy
  11. It’s a no-brainer
  12. You can’t afford not to own it
  13. We can beat the market
  14. You’ll be sorry if you don’t
  15. Exclusive
  16. You should focus on performance, not fees
  17. Don’t you want to be rich
  18. Can’t loose
  19. The upside is huge
  20. There’s no downside
  21. I’m putting my mother in it
  22. Trust me
  23. Commodities trading
  24. Monthly returns
  25. Active asset-allocation strategy
  26. We can cap you downside
  27. No one else know how to do this.


All about Leave Travel Concession

Basically,  Leave Travel Allowance is a monetary benefit that you get on the expenses you incur when you travel.  Here’s to clearing your doubts.

1. On what basis can I claim LTA?

If you fulfill two criteria, you can do so:

i) You should have taken leave from your company

ii) You should actually travel

You can either travel alone or with your family. However, if your family travels without you, no LTA can be claimed.

2. How often can I claim LTA?

i) Twice in a block of four calendar years.

ii) LTA is not related to when you started your employment as the government has fixed blocks of years for the purpose of claim.

iii) These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).

iv) The current block is 2010-13, that is, between January 2010 and December 2013.

v) During this time period, a person is entitled to two LTA claims.

vi) A person can get an income tax exemption for two journeys in a block of four calendar years. But he can make a trip only once in year.

3. What if I fail to avail of it?

In case you fail to do so, there is a carry over option.

Let’s say that in the block of four years, you never did claim any LTA. You can do so in the first year of the next block of four years.

4. What is the proof of travel to avail of LTA?

According to rule 2B, you can produce an air, rail or any public transport ticket. You can even submit the bills issued by the car rental company if you rent a vehicle. However, the travel is applicable anywhere in India  and not abroad. So an international air ticket will not hold.

5. Is LTA taxed?

You can receive LTA as either reimbursement or allowance.


In case of LTA as reimbursement, it is not taxable.

Let’s say your company offers an LTA of Rs 50,000. For proof of travel, you produce an air ticket of Rs 10,000. In such a case, you can claim only Rs 10,000 as LTA and it will be exempt from tax.


If you do not submit any proof of travel, you will get your LTA but will have to pay tax on it. If you produce proof of travel, it will not be taxable to the extent your proof of travel is covered.

Let’s say you are entitled to Rs 50,000 as LTA as part of your salary. Since you produced proof of travel as Rs 10,000, you will not be taxed on this amount. However you will be taxed on the net Rs 40,000 as per your

income tax slab rate.

LTA is not a fringe benefit as the latter are benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.

6. Can both spouses claim LTA?

If both spouses are getting the LTA benefit in their places of work, they can both claim exemption on LTA from their employers and the benefit for four journeys in one block.

They do not have to take the precaution of not travelling twice during the same year.

Moreover, they can take the same family members or different ones as long as they stick to the definition of the members for this purpose.

Family includes spouse, children as well as dependent parents, brothers and sisters. In respect of children born on or after October 1, 1998, the exemption will be restricted only to two surviving children unless the birth after one child has resulted in multiple births (twins or triplets).

7. If I and my wife travel this year, can we both claim LTA simultaneously?

No. You cannot claim LTA twice for the same journey. If both of you take a holiday together and you claim LTA, she cannot.

8. If I am entitled to a particular amount as LTA, but my expenses are higher, can I claim more?

Say in the year 2005-06, you receive on Rs 8,000 as LTA, but spend Rs 50,000 on travel. You can claim exemption only to the tune of Rs 8,000.

the law stated above is as on Feb 2012