Leave Travel Allowance (LTA) - Exemption Limit, Rules, How to Claim, Eligibility & Latest Updates

By Ektha Surana


Updated on: Jun 27th, 2024


3 min read

The Income-tax Act, 1961 offers salaried individuals several tax exemptions, beyond deductions like LIC premiums and housing loan interest. While deductions reduce your total taxable income, exemptions exclude specific types of income from being taxed altogether. This allows employers to design an employee's Cost to Company (CTC) package in a tax-efficient manner.

One such exemption available to the salaried class under the law and widely used by employers is Leave Travel Allowance (LTA)/Leave Travel Concession (LTC). LTA exemption is also available for LTA received from former employer w.r.t travel after the retirement of service or termination of service. LTA can be claimed for any two years in a block of 4 calendar years. The current block year for claiming LTA is 2022 to 2025.

Note: The tax exemption of leave travel allowance is not available in case you choose the new tax regime.

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance/Leave Travel Concession is a type of allowance given by an employer to their employee for travelling to any place in India: either on leave, after retirement or after the termination of his service. Though it sounds simple, many factors need to be kept in mind before you plan to claim an LTA exemption. Income tax provision has laid down rules for claiming exemption of LTA which are provided below.

LTA exemption Section 10(5)

Note: The red arrow shows the lower of the two amounts will be exempted. For instance, if you travel by air, the exemption amount will be either your actual travel costs or the cost of an economy class ticket, whichever is lower. The journey should be taken through the shortest route to the destination. 

Who Can Claim LTA?

Only individuals(citizens and non-citizens) can claim LTA for travel costs incurred for themselves and their family (Spouse, children, wholly or mainly dependent siblings, parents)

Conditions for Claiming LTA

Let us understand the conditions/requirements for claiming the exemption:

  • is a must to claim the exemption
  • Only domestic travel is considered for exemption, i.e., travel within India. No international travel is covered under LTA/LTC
  • The exemption for travel is available for the employee alone or with his family, where ‘family’ includes the employee’s spouse, children and wholly or mainly dependent parents, brothers, and sisters of the employee. 
  • Further, such an exemption is not available for more than two children of an employee born after 1 October 1998. Children born before 1 October 1998 do not have any restrictions. Further, in cases of multiple births on a second occasion after having one child is also not affected by this restriction.
  • Valid Proof of travel is essential to claim the exemption.

Amount of LTA/LTC Exemption

The exemption is available only on the actual travel costs i.e., the air, rail or bus fare incurred by the employee. No expenses such as local conveyance, sightseeing, hotel accommodation, food, etc., are eligible for this exemption. The exemption is also limited to LTA provided by the employer.

For example, if LTA granted by the employer is Rs 30,000, and the actual travel cost incurred by the employee is Rs 20,000, then only Rs 20,000 will be available as an exemption and the balance of Rs 10,000 would be included in taxable salary income.

Exemption w.r.t Various Modes of Transport

Sl. No.Journey through (Mode of travel)Limit under LTA
1.AirLower of the following amounts:  
- Actual Expenses or 
- Economy class air fare of the national carrier(Indian Airlines or Air India) by the shortest route to the place of destination.
2.Any other mode:
i)Rail service is availableLower of the following amounts:  
- Actual Expenses or 
- Air-conditioned first class rail fare by the shortest route to the place of destination
ii)Rail service is not available 
a)No recognised public transport systemLower of the following amounts:  
- Actual Expenses or 
- 1st class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail.
b)Recognised public transport system existsLower of the following amounts:  
- Actual Expenses or 
- 1st class or deluxe class fare by the shortest route to the place of destination

Can LTA Exemption be Claimed on Every Vacation?

No, an LTA exemption is available for only two journeys performed in a block of four calendar years.

Block Year

A block year is different from a financial year and is decided by the Government for LTA exemption purposes. It comprises 4 years each. The very first 4-year block commenced in 1986. The list of block years is 1986-1989, 1990-93, 1994-97, 1998-2001, 2002-05, 2006-09, 2010-13 and so on. The block applicable for the current period is  2022-25. The previous block was the calendar year 2018-21.

Carryover of Unclaimed LTA/LTC

In case an employee has not availed exemption with respect to one or two journeys in any of the block of 4 years, he is allowed to carryover one such unavailed LTC exemption to the next block provided he avails this benefit, in the first calendar year of the immediately succeeding block. 

Consider the below example for a better understanding:

Where carry over exemption is claimed in the first calendar year of the immediately succeeding block

Particulars of journeyBlock year 2014-17Block year 2018-21
April 2015Exemption claimed in April 2015NA
June 2018NAExemption claimed in June 2018 (considered to be carried over from the previous block)
March 2020NAExemption claimed in March 2020
January 2021NAExemption claimed in January 2021

Where carry over exemption is not claimed in the first calendar year of the immediately succeeding block

Particulars of journeyBlock year 2014-17Block year 2018-21
April 2015Exemption claimed in April 2015NA
June 2019NAExemption claimed in June 2019 (Can’t be considered to be carried over from the previous block as travel should have been performed in 2018 itself)
March 2020NAExemption claimed in March 2020
January 2021NANo exemption is available as two eligible journeys already claimed. (Maybe claimed by the working spouse of the employee receiving LTA)

Procedure to Claim LTA

The procedure to claim LTA is generally employer specific. Every employer announces the due date within which LTA can be claimed by the employees and may require employees to submit proof of travel such as tickets, boarding pass, invoice provided by travel agent etc., along with the mandatory declaration. Though it is not mandatory for employers to collect proof of travel, it is always advisable for employees to keep copies for his/her records and also to submit them to the employer based on the LTA policy of the company to tax authorities on demand.

Multi-Destination Journey

Income tax provision provides exemption w.r.t travel cost incurred on leave to any place in India. Conditions pertaining to the mode of transport also refer to the place of ‘origin’ to the place of ‘destination’ and the route which must be the shortest available route.

Hence, if an employee travels to different places in a single vacation, the exemption can only be availed for the travel cost eligible from the place of origin to the farthest place in the vacation by the shortest possible route.

LTA Exemption for Vacation on Holidays

Many organisations that go strictly by the wordings of the income tax provision are allowing employees to claim LTA only if the employee applies for leaves and travel during that time. Such organisations may reject LTA claims for travel on official holidays or weekends. 

Also read about: 
Basic Salary 
UAN Login 
Last Date to File ITR  
Section 115BAC of Income Tax Act  
Income Tax Deductions List 
How to e verify ITR  
Annual Information Statement (AIS) 
Section 80D  
Home Loan Tax Benefit 
House Rent Allowance (HRA)
Budget 2024 Highlights

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Frequently Asked Questions

How much can I claim tax exemption in Leave Travel Allowance/Leave travel concession or LTA/LTC?

The amount of LTA/LTC exemption depends on the LTA/LTC component in your compensation package or CTC. You can furnish proof of travel within the block period and claim up to the amount prescribed in your CTC.

What is the latest block period to claim LTA/LTC exemption?

The latest block period of four years is from 1 January 2022 until 31 December 2025.

How many trips can I make in one year to claim the exemption?

You can claim LTA/LTC exemption only for one trip in one calendar year.

Can I claim LTA/LTC benefit for the travel costs of my family?

You can claim LTA/LTC benefit for the travel costs of yourself and your family consisting of your spouse, children, dependent parents, brothers, and sisters of the employee.

Can I claim LTC if I pay taxes under new tax regime?

No, LTC is taxable in case of new tax regime and exempted if chosen to pay tax under old tax regime by fulfilling the required criteria.

How many journeys will be exempted in a block of 4 calendar years?

Exemption will be available in respect of 2 journeys performed in a block of 4 calendar years.

I haven’t availed LTC in the previous block (2018-2021), so can I avail the LTC of previous block in the current block (2022-2025)?

Yes, you can avail LTC in current block (2022-2025), if you have not availed LTC in previous block. (2018-2021). Where such travel concession or assistance is not availed by the individual during any block of 4 calendar years, one such un-availed LTC will be carried forward to the immediately succeeding block of 4 calendar years and will be eligible for exemption. 

Below example gives you clear understanding :

Example: An employee does not avail any LTC for the block 2018-21. He is allowed to carry forward maximum one un-availed LTC to be used in the succeeding block of 2022-25. Accordingly, if he avails LTC in April, 2023, the same will be treated as having availed in respect of the block 2018-2021. Therefore, he will be eligible for exemption in respect of that journey and two more journeys can be further availed in respect of the block of 2022-25.

Illustration : Mr. D went on a holiday on 25.12.2023 to Delhi with his wife and three children (one son – age 5 years; twin daughters – age 3 years). They went by flight (economy class) and the total cost of tickets reimbursed by his employer was 60,000 (45,000 for adults and 15,000 for the three minor children). Compute the amount of LTC exempt if Mr. D chose to pay taxes under old regime.

Solution : Since the son’s age is more than the twin daughters, Mr. D can avail exemption for all his three children. The restriction of two children is not applicable to multiple births after one child. The holiday being in India and the journey being performed by air (economy class), the entire reimbursement met by the employer is fully exempt in the hands of Mr. D, since he chose to pay taxes under the old regime.

In the above illustration, will there be any difference if among his three children the twins were 5 years old and the son 3 years old? 

Since the twins’ age is more than the son, Mr. D cannot avail for exemption for all his three children. LTC exemption can be availed in respect of only two children. 

Taxable LTC = 15,000 × 1/3 = 5,000. 

LTC exempt would be only 55,000 (i.e. 60,000 – 5,000).

Can an employee claim LTA/LTC only if their family travels?

No LTA/LTC exemption would be allowed if the employee does not travel along with the family.

About the Author

Multitasking between pouring myself coffees and poring over the ever-changing tax laws. Here, I've authored 100+ blogs on income tax and simplified complex income tax topics like the intimidating crypto tax rules, old vs new tax regime debate, changes in debt funds taxation, budget analysis and more. Some combinations I like- tax and content, finance & startups, technology & psychology, fitness & neuroscience. Read more


Quick Summary

The Income-tax Act, 1961 offers various tax exemptions, including Leave Travel Allowance (LTA) for salaried employees. LTA can be claimed for domestic travel within India with valid proof of travel. The exemption is limited to actual travel costs and is available for two journeys in a block of four calendar years. Unclaimed LTA can be carried over to the next block. Employers have specific procedures for LTA claims.

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