Save Tax on Salary & What is LTA

Understanding “Saving on Salaries”
Following allowances and reimbursements are not taxable up to certain exemption limits. I would completely explain one to one of above and I am sure you can get better understanding on each concept and save tax which is deductable in the form of TDS.
§ House Rent Allowance ('HRA')
§ Leave Travel Assistance ('LTA')
§ Medical reimbursements
§ Transport Allowance
§ Education Allowances
§ Food Coupons
Today’s Topic: LTA
To start with let’s read LTA completely in simple words and revert with your comments on this series of notes.
How to use?
LTA (Leave Travel Allowance) is taxable under the Act subject to prescribed exemption. The exemption is available based on the expenses you actually incur on travel fare, subject to the following:
§ the travel is undertaken by you and can include your family members; and
§ is for proceeding on leave to any place in India.
This exemption can be claimed only in respect of two journeys performed in a block of four calendar years.
Current Block of years!
2. The current block is for journeys performed during the years 2010 to 2013. But note, LTA block is measured in Calendar Years and not Financial Years, so the current block is Jan 1st, 2010 to Dec 31st, 2013.
Eligibility to claim!
3. No. LTA is exempt for travel undertaken by your family members, where “family” is defined as:
§ your spouse and children; and
§ your parents, brothers and sisters
Keep in mind that your family members have to be wholly or mainly financially dependent on you for you to claim LTA on their journeys. Also, the above-mentioned exemption does not apply to more than two children born after 1 October 1998.

How to Calculate?
4. As per the Rules, the conditions/ limitations for the exemption are as follows
Particulars
Amount exempt
Where the journey is performed by air.
Economy class airfare of the national carrier by the shortest route to the place of destination or amount actually spent, whichever is less.
Where the places of origin of journey and destination are connected by rail and journey is performed by any mode of transport other than air.
Air-conditioned first class rail fare by the shortest route to the place of destination or amount actually spent, whichever is less.
Where the place of origin of journey and destination (or part thereof) are not connected by rail

Where a recognised public transport exists
First class or deluxe class fare by the shortest route or the amount spent, whichever is less.
Where no recognised public transport system exists
Air-conditioned first class rail fare by the shortest route (as if the journey is performed by rail) or the amount actually spent, whichever is less.
Carry Forward?
5. Yes, only one out of the two allowed journeys can be carried forward. It should be carried forward to the first calendar year of the immediately succeeding block of four calendar years. The carry forward has no detrimental effect on the new block of 4 years. Apart from 1 journey carried forward from the last block, you will still be eligible for LTA of the 2 journeys in the new block.