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

Leave Travel Allowance (LTA) lets salaried employees claim tax-free reimbursement for travel within India. Here’s how to calculate, claim, and save taxes under Section 10(5).

Key Highlights

• Leave Travel Concession is an employee reimbursement for vacation expenses within India.
• Exemption can be claimed for 2 out of 4 block years. The current block year is 2022-25.
• Leave Travel Allowance is available only under the old regime.

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance / Leave Travel Concession is a type of allowance given to employees for travelling to any place in India. It forms part of your salary structure, and it can be used as a tax reduction tool, since deductions are provided under section 10(5) of the Income Tax Act. 

Eligibility for LTA

Only individuals (residents and non-residents) can claim LTA for travel costs incurred on tour within India. Expenses can be claimed for self and family. Family includes the following:

• Spouse
• Children
• Dependent siblings and parents.

Expenses Covered under LTA Exemption 

• For Air Travel: Economy class fare of Air India can be claimed as exemption
• For Travel by Rail: 1st class A/C fare is eligible for exemption
• Other Modes of Transport: If the railways do not exist for the journey route, 1st class A/C bus fare of recognized modes of transport can be claimed as an exemption.
• No Recognized modes of Transport:  1st class of the A/C rail for the same distance can be claimed as exemption.
• Local conveyance, sightseeing, food and accommodation expenses cannot be claimed as exemption.

Exemption Limit

• If the actual expense incurred on travel is less than the above specified expenses, only the actual travel expenses can be claimed as exemption. Therefore the limit can be summarized as the lower of the following:
  • Amount provided by the employer as leave travel concession
  • Fare of economy class of flight, 1st class A/C rail fare, 1st Class Deluxe bus fare, as applicable.
• LTA can be claimed for maximum of 2 children. If twins are born after first child, the restriction is not applicable.

A pictorial representation of the above limit is explained below.

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.

Concept of Block Year

LTA exemption is available for only two journeys performed in a block of four calendar years.

• A block year is different from a financial year and is decided by the Government for LTA exemption purposes. 
• It comprises 4 calendar years each.

The block applicable for the current period is  2022-25.

Carryover of Unclaimed LTA/LTC

• If the employee has not availed exemption for 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.
• The carried forward exemption should be availed in the first calendar year of the immediately succeeding block. 

Leave Travel Allowance Calculation - Examples

Ms. Ankita has traveled to Shimla in Dec 2025, with her husband and three children. She booked flight tickets costing Rs 10,000 each, both for arrival and departure. She received Rs 50,000 as LTA from her employer. Calculate the exempt Leave Travel Allowance.

Answer: 

• Total ticket expenses - Rs 10,000 x 5 x 2 = Rs 1 lakh. (This amount equals the economy class fare in Air India)
• Leave Travel Allowance is allowed only for spouse and maximum two children. Therefore, claimable LTA is Rs 10,000 x 2 x4 = Rs 80,000.  
• Actual LTA given by employer Rs 50,000.

The lower of the above three can be claimed as an exemption. Therefore, in Ms Ankita's case, Rs 50,000 can be claimed as LTA exemption. If she chooses, new regime LTA exemption is not available.

Ms Ankita, has traveled to Dubai with her family in Dec 2024. Flight tickets totally costed Rs 2 lakhs. Calculate the exempt Leave Travel Allowance.

Answer: Since the travel is outside India, Leave Travel Allowance is not allowed.

Ms Ankita traveled to Andaman and Nicobar Islands with her family on Sep 2025. Total tickets costed Rs 60,000 and the allowance granted by the employer costed Rs 50,000. She did not claim the exemption for FY 2025-26. 

Answer: 2025 is the last year of the block years 2022-25. The exemption was not availed in the current block. Therefore, she can avail Rs 50,000 exemption in the first year of next block - 2026-29 (FY 2026-27). She cannot claim the exemption later.

How to claim LTA in Form 16 / ITR?

Through Form 16

• 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 to submit proof of travel such as tickets, boarding pass, invoice etc., along with the mandatory declaration. 
• This will be incorporated in the Form 16 of the employees, and the same exemption can be claimed in ITR.

Through ITR

• If you have missed to file proof documents to the employer, and the exemption is not reflected in form 16, you can still claim the LTA exemption while filing ITR.
• You can claim it under the Gross Total Income> Salary Income> Exempt Allowance, and Section 10(5)  - Leave Travel Allowance in the drop down while filing ITR.

Leave Travel Allowance under New Tax Regime

There are various deductions are exemptions that are restricted under the new regime. LTA is one such deduction. Leave Travel Allowance is not available under the new tax regime. Therefore, you have to opt for old regime to claim exemption of leave travel allowance.

Common LTA Mistakes to Avoid

• Accommodation and Sightseeing expenses: Only travel ticket costs are allowed as an exemption. Accommodation and sightseeing costs cannot be claimed.
• Documentation Deficiency: If you are not maintaining original tickets, invoices, boarding passe, etc, you cannot prove the occurence of expenses, if your return is shortlisted for scrutiny.
• Choosing the wrong field in ITR: Leave Travel Allowance should be claimed only under the respective field available for it in the ITR. Choosing the wrong field may trigger notices, also can invalidate the exemption claim, unless rectified.
• File ITR within Due Date: If you miss the due date, you cannot claim exemption. Because, the exemption is available only under the old regime, and the old regime cannot be opted if you miss the due date.

Multi-Destination Journey

• As per the provisions of the act, computation of LTA exemption is given only to the extent of ‘Shortest route from the origin to destination’.
• So, if the journey has 2 or 3 destinations, the shortest distance from starting point to the farthest destination only will be considered. Whole of the travel expenses cannot be claimed.

LTA Exemption for Vacation on Holidays

Many organizations 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 organizations may reject LTA claims for travel on official holidays or weekends.