LTA (Leave Travel Allowance)

What is LTA (Leave Travel Allowance)?

Leave Travel Allowance lets employees claim tax exemption on travel expenses during a leave period. The exemption is available only in the old tax regime under Section 10(5). Two journeys can be claimed in a block of four calendar years. The current block runs from 2022 to 2025. Only travel cost within India counts, so flights, trains, or bus fare for self, spouse, children, and dependent parents/siblings. Hotel, food, sightseeing, and overseas travel are not covered. The exemption is limited to economy airfare on the shortest route or AC first class rail fare. You must submit tickets and travel proof to your employer. If you do not claim within the block, you can carry one journey forward to the first year of the next block.

Formula: Exempt LTA = lower of (actual travel cost) or (LTA component in CTC) or (eligible fare cap for the mode of travel)

Example

LTA in CTC ₹60,000. You travel Bengaluru to Goa with family, flight tickets ₹45,000. Exempt = ₹45,000. Balance ₹15,000 paid as taxable salary.

How LTA (Leave Travel Allowance) is used

Set up an LTA claim window in the payroll system, collect tickets and boarding passes, mark exempt portion in Form 16. Remind staff before March 2025 that the block ends.

LTA (Leave Travel Allowance) FAQs

Can I claim LTA in the new regime?

No. LTA exemption is only available in the old regime.

What if I travel abroad?

Foreign travel is not eligible. Only domestic travel within India.

Can both spouses claim LTA in the same year?

Yes, if both are employed and have LTA in their CTC, but not for the same trip.