Leave Travel Allowance (LTA) is a popular tax exemption benefit available to salaried employees in India. It is covered under Section 10(5) of the Income Tax Act, 1961 and Rule 2B of the Income Tax Rules. Here's a complete and detailed breakdown of LTA exemptions:
LTA is an allowance provided by an employer to the employee for traveling within India with family during leave from work. The employee can claim exemption from tax for the amount spent on domestic travel.
Only travel fare is exempt under LTA. This includes:
Airfare (Economy class – only national carriers)
Train fare (AC First Class or equivalent if train is available)
Bus fare (for areas not connected by rail/air – premium bus)
Hotel stay
Food expenses
Sightseeing or local transport
Travel outside India
Exemption can be claimed for:
Employee
Spouse
Children (only up to 2 children born after October 1, 1998)
Dependent parents
Dependent siblings (unmarried and financially dependent)
You can claim LTA exemption twice in a block of four calendar years.
Current block (2022–2025)
Earlier blocks: 2018–2021, 2014–2017, etc.
If not claimed in a block, one trip can be carried forward to the first year of the next block.
Proof of travel (tickets, boarding passes) must be submitted to the employer.
Travel must occur during leave or holidays.
Only actual fare spent is exempt, up to the limit of the LTA provided in your salary.
Journey must be within India only.
No exemption is allowed if the travel did not happen.
Travel Route - Maximum Allowed Fare for Exemption
Air - Economy fare of national carrier (e.g., Air India) for shortest route
Train (available) - AC First Class fare for shortest route
No Train/Air - Deluxe/Premium bus fare by government or recognized transport
Let’s say your employer provides ₹40,000 LTA per year.
You take a family trip from Delhi to Mumbai and spend:
Airfare (Economy): ₹25,000 (for family)
Hotel: ₹15,000
Food & local travel: ₹5,000
Exemption you can claim: ₹25,000
Other expenses (hotel, food) are not exempt.
If you opt for the new tax regime, LTA exemption is not available. It is only available if you continue under the old regime.
Tickets (train/air/bus)
Invoices if travel booked through agencies
Boarding passes (if air travel)
Leave application or approval (some employers require this)
Claiming hotel/meal expenses
Travel outside India
No proof of travel
More than 2 children born after 1 Oct 1998
Claiming in the new tax regime
Applicable to - Salaried employees (old tax regime)
Exemption limit - Actual travel cost (within LTA limit)
Travel Type - Only within India
Frequency - 2 times in 4-year block
Covered Members - Spouse, up to 2 children, parents, siblings (dependent)
Proof Required - Travel tickets, boarding pass, leave application