Government may relax LTC norms in Budget to boost tourism

New Delhi: In order to give boost to the tourism sector, the Budget for 2015-16 is likely to expand the scope of LTA and LTC by including hotel and other expenses besides travel for the purpose of tax benefit.

The Ministry, sources said, it is also considering a proposal to allow employees to avail Leave Travel Concession (LTC)/ Leave Travel Allowance (LTA) every year as against the current practice of two times in a block of four years. At present, LTA or LTC covers only economy class air travel or first class (AC I Class) rail fare.

An announcement in this regard is likely to be made in the Budget to be presented by Finance Minister Arun Jaitley on February 28. Prime Minister Narendra Modi had earlier expressed his keenness to promote tourism. Experts are of the view that encouragement to the tourism sector will promote development of different regions and create employment opportunities.

"To boost domestic tourism and also provide some tax relief to the individuals, the Leave Travel Concession benefit should be increased to one visit for every financial year," KPMG (India) Partner Vikas Vasal said.

He further suggested that tax concessions should also be made available for stay in hotel may also be covered to help families avail of a holistic benefit. The LTC/LTA is available to the individual and his family including spouse, two children, parents, brothers and sisters, who are wholly dependent on the assessee.

"There is a huge scope for developing the tourism industry in India which provides direct and indirect employment to millions of people. Therefore, an enhanced tax relief to individuals on LTC will benefit the overall economy," Vasal said.