Leave Travel Allowance (LTA) is a component of salary that can be claimed as tax-free when you travel within India with your family. It is one of the few allowances that many employees claim without fully understanding the rules-leading to incorrect claims or missed opportunities.
How LTA Works
- LTA is exempt from tax for two journeys in a block of 4 calendar years
- Current block: 2022\u20132025 (4th block). Next block: 2026\u20132029
- Only domestic travel within India qualifies. International trips do not
- The exemption covers the actual cost of economy airfare, AC 1st class train fare, or AC bus fare
Who Can Travel?
You, your spouse, your children, and dependent parents and siblings can be included. Children born after October 1, 1998: LTA is restricted to two children only.
What Is Not Covered
- Hotel accommodation, food, local conveyance at the destination
- Travel by private car
- International travel even if connecting from India
LTA and the New Tax Regime
LTA exemption is not available under the new tax regime. Only the old regime allows this benefit.
Carry Forward Rule
If you do not use both LTA claims in a block, one unclaimed journey can be carried forward to the first year of the next block. However, this carry-forward does not reduce LTA claims in the new block (you still get only 2 new claims).
How to Claim
Submit travel tickets, boarding passes, and a leave application to your employer\u2019s payroll team. They will adjust your TDS accordingly.
Check if LTA is part of your CTC using the SaveTaxNow Calculator to quantify the tax saving.