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Leave Travel Allowance (LTA): Exemptions Limit, Rules, Eligibility & How to Claim?

Team AckoNov 27, 2025

Everyone loves a good vacation. It's a chance to relax, unwind, explore new places, and recharge. But did you know your travel expenses can also bring you tax benefits? That’s where Leave Travel Allowance (LTA) comes in.

Leave Travel Allowance (LTA) allows salaried employees to claim tax-free reimbursement for travel within India. Here’s a quick look at how it works - from calculating your eligible amount to claiming it and saving taxes under Section 10(5) of the Income Tax Act.

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Contents

What is Leave Travel Allowance (LTA)?
Who Is Eligible for LTA?
What are the Expenses Covered under LTA?
Example of LTA Calculation
How to Claim Leave Travel Allowance?
How many times can you claim LTA?
Important Rules for LTA Claim
Leave Travel Allowance and Tax Benefits
Tips to Make the Most of Your LTA
Conclusion
Frequently Asked Questions

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance is a component of your salary package that allows you to claim tax exemptions for the travel costs incurred while taking a trip within India. It’s one of those employee perks that literally make work-life balance not just possible but rewarding.

Under Section 10(5) of the Income Tax Act, the amount you get as LTA can be tax-free as long as you meet certain conditions like where you travel, who accompanies you, and the type of expenses you claim.

It’s important to remember that LTA only applies to travel within India. Any foreign trips, even if partially combined with a domestic leg, don’t qualify for exemption.

Who Is Eligible for LTA?

Let's take a look at who can use LTA benefits:

You must be a salaried employee: LTA is available only to employees whose company includes it as part of their salary or benefits package.
You must be on approved leave: You can claim LTA only when you’re officially on leave and actually travelling.
You can claim for family members: LTA also covers travel costs for your spouse, up to two children, and dependent parents or siblings.
Travel must be domestic: Only trips taken within India are eligible.
Actual travel must take place: You can’t claim LTA for unutilised or trips that have not taken place, proof of travel is mandatory.

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What are the Expenses Covered under LTA?

LTA exemptions are limited to travel expenses only, not the entire cost of your trip. That means:

Covered:

Airfare (restricted to the economy class of the national carrier)
Train fare (up to first-class AC)
Bus or similar public transport fare if no train or flight is available

Not Covered:

Hotel stay, food, sightseeing, and other expenses related to the vacation

Example of LTA Calculation

Let’s say your employer provides ₹40,000 as Leave Travel Allowance for the year. You travel with your spouse and two children from Delhi to Goa and back. The total round-trip airfare (economy class) is ₹30,000.

Since the actual travel cost is ₹30,000, that’s the amount eligible for exemption. The remaining ₹10,000 (unused portion of LTA) becomes taxable income.

How to Claim Leave Travel Allowance?

The process of claiming leave travel allowance is fairly simple. Here’s a step-by-step on how to claim LTA.

Step 1: Plan and take your trip

Make sure your travel dates align with your approved leave from work.

Step 2: Collect valid travel proofs

Keep all tickets, boarding passes, invoices, and receipts. These serve as proof of your journey.

Step 3: Submit documents

Every organisation has its own LTA process, usually involving a claim form and proof submission.

Step 4: Employer verification

Your HR or finance team will verify your documents to make sure that they meet the LTA criteria.

Step 5: Tax exemption

Once approved, the LTA amount will be adjusted in your Form 16 or while filing your income tax return.

How many times can you claim LTA?

The government allows employees to claim LTA exemption twice in a block of four years. These blocks are predefined by the Income Tax Department. For example, the current block is 2022-2025.

If you fail to claim LTA in a given block, you can carry over one unclaimed exemption to the next block, but it must be used in the first year of the next block.

Important Rules for LTA Claim

Here are some quick reminders to keep your LTA claims error-free:

Only domestic travel qualifies.
Proof of travel is mandatory; any missing tickets or receipts can disqualify your claim.
Only two children are eligible (children born after October 1, 1998, are subject to this limit).
Only travel fare is exempt, which means accommodation or meals are not eligible for LTA.
Two claims per four-year block rule apply strictly.

Leave Travel Allowance and Tax Benefits

LTA is one of the most effective ways to save on taxes while still enjoying your holidays. However, if you don’t actually travel during the year, the unclaimed leave allowance becomes part of your taxable income. You can plan your trips smartly to make the most of this benefit.

Employers also differ in how they structure leave travel allowance payouts; some include it as part of the annual salary, while others reimburse based on actual expenses. Either way, the exemption applies only when there’s proof of travel and an approved claim.

Tips to Make the Most of Your LTA

Here are a few ways you can make the most of the benefits that LTA offers:

Plan ahead: Since exemptions are allowed only twice in four years, choose your travel periods wisely.
Keep records: Store all tickets and invoices digitally to avoid losing them.
Combine wisely: If your spouse also receives LTA, plan trips alternately to claim benefits in consecutive years.
Check your employer's policy: Every company may have its own rules for the documents you need to submit and when.

Conclusion

Leave Travel Allowance is more than just a salary component; it’s a chance to take well-deserved breaks while also reducing your taxes. By knowing what the rules of eligibility are, what exactly the exemptions are, how the LTA claim procedures work, etc., you can plan your travel smartly and make the most of your benefits.

Whether it’s a quiet family getaway or an adventurous solo trip, your LTA helps turn those vacation dreams into tax-saving realities. It's something that benefits you and your loved ones - and that's a benefit worth doing your research for.

Frequently Asked Questions

Why do I need to know about this?

LTA helps you save on travel-related taxes, while travel insurance protects you from trip risks like delays or medical emergencies. They serve different purposes but complement each other. By knowing this, you can make the most of both.

Does Leave Travel Allowance mean I get cash in hand for my trips?

Not exactly. LTA isn’t an upfront cash payment for your vacation. It’s a reimbursement or allowance your employer provides as part of your salary, and you get the tax exemption only after submitting valid travel proofs.

Can I claim this for international trips?

No. LTA exemptions apply only to travel within India.

Do I get this benefit from my insurer?

No. LTA is offered by your employer, not your insurer.

Can I claim LTA if I travel in my personal car?

No. You can only claim LTA for travel using public transport like air, rail, or recognised bus services.

Can both husband and wife claim this for the same trip?

No, the same journey cannot be claimed by both. But couples can alternate claims in different years if both receive this benefit from their employers.

Can I carry forward an unclaimed LTA to the next block?

Yes, you can carry forward one unclaimed trip to the next block, but it must be used in the first year of that block.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes. Please check the policy document for cancellation reasons, and terms and conditions of the policy.