What is Leave Travel Allowance or LTA?

Leave Travel Allowance or LTA is type of allowance provided by the employer for the employee to cover his travel expenses during leave. LTA is eligible for income tax exemption as per the Income Tax Act 1961 under Section 10(5).

Let’s find out how you can save tax while traveling with your family.

Conditions for claiming Leave Travel Allowance

  • Exemption is available only on actual travel costs(Air, rail, or bus)

  • Only domestic travel is considered

  • Exemption is available for travel cost of individual & family

leave travel allowance
leave travel allowance

You can claim travel costs of

  • Self

  • Spouse

  • Children (Max 2)

  • Dependant Parents

  • Dependant siblings

Conditions for eligibility

  • Exemption is available only on actual travel costs(Air, rail, or bus)

  • Taxi fares can be claimed if no bus service is available to reach the destination. You can claim first class rail fare for the distance travelled

Leave Travel Allowance eligibility
  • If traveling by air, fare is restricted to economy fare of Air India, by the shortest route possible

  • If traveling by train, fare is restricted to first class fare by the shortest route possible

  • If traveling by bus, fare is restricted to deluxe fare

  • If your travel has multiple destinations, only shortest route from origin to destination is considered

Leave Travel Allowance Block

Block of 4 Years

  • LTA exemption cannot be claimed every year

  • Exemption is allowed for two journeys with in a block of 4 years

  • The block applicable for the current period is Jan 18 to Dec 21

  • The next period is Jan 22 to Dec 25

How to claim Leave Travel Allowance

  • Your employer should have paid you under the head LTA(Leave Travel Allowance)

  • You have to submit proof of travel such as boarding pass, train ticket or invoice from travel agent

Claim LTA

Now, let’s use the income tax calculator to see how much tax you can save while travelling with your family.

Step 1: Open the income tax calculator

Step 2: Key in your salary details

Salary Earnings
Salary Deductions

Step 3: Declare your investments

Income Tax Declarations

Step 4: Now, calculate income tax

Income Tax Calculation

As per the calculation, you have a total tax liability of INR 100000

Step 5: Declare your Leave Travel Expenses

Leave Travel Expenses

I’ve travelled with my family to Jaipur and the cost of travel was INR 60000.

Step 6: Calculate income tax again

LTA Calculation

As you see, the total tax liability has come down by INR 12480

New to Income tax? There is nothing to worry about!
Calculate your Income Tax with data from your payslip

LTA exemption allows you to travel within India with your family while saving Income Tax!

Frequently Asked Questions

What is Leave Travel Allowance(LTA)?

LTA is an allowance the employer pays to the employee to cover his travel expenses while on leave.

What is Leave Travel Allowance Exemption(LTA Exemption)?

If your employer pays you LTA and if you have travelled within India, you can claim for an exemption under Section 10(5) of the Income Tax Act.

Is LTA eligible for Income Tax Exemption?

As per Section 10(5) of the Income Tax Act 1961, Leave Travel Allowance is eligible for Income tax Exemption.

How many times LTA can be claimed in an year?

LTA can be claimed only twice in a block of 4 years. The current block period of four years is from January 1, 2022 to December 31, 2025.

What expenses can be claimed under LTA?

Only travel expenses can be claimed. Other expenses during travel such as food and accommodation are not allowed for exemption.

Can I claim LTA exemption on International travel cost?

LTA exemption is allowed only for travel within India.

What if I haven’t claimed any LTA exemption in a block of 4 years?

If you haven’t claimed LTA exemption or if you have claimed only once during a block of four years, you can claim one additional LTA in the next block of four years. But the additional one should be claimed in the first calendar year of the block of 4 years.

How to calculate Leave Travel Allowance exemption?

Use the Income Tax Calculator to calculate your Leave Travel Allowance exemption. First, key in data from your payslip, and then declare your travel expenses during leave.