If LTA forms a part of your salary, then this allowance can be availed on a trip within India. This does not apply for foreign travel.
This concession is allowed for the employee and his family where family means spouse and children. This allowance is limited to two children only and that too to only those born after Oct 1, 1998. This could also be a stepchild or an adopted one. The Income Tax Department counts twins as one unit.
The family could also include parents, brother, sister, who are wholly or mainly dependent on the employee. But the employee must be on the trip with them.
It is also only for the shortest distance between two places. Let’s say, you, you husband and two children take a flight between Delhi and Mumbai and on your way back you stop at Ahmedabad and Jaipur, the concession can only be claimed for the Delhi-Mumbai distance.
Note that only 2 journeys can be claimed in a block of 4 years. We are currently on the 1st Jan 2014- 31 Dec 2017 block. You can claim two journeys against your LTA within this period.
Rahul and Anjali take a vacation with their two kids every year for all the four years. Rahul and Anjali are salaried and both their offices offer a LTA component as part of their salaries. Anjali can claim 2 concessions and Rahul can get the other two.
If you went only on one vacation in these four years, the other one can be carry forwarded on the next 4-year block, but this must be claimed in the first year of the next block, meaning by 31 Dec 2018.
Plan your vacation already!