What LTA is

Leave Travel Allowance (LTA), also called Leave Travel Concession (LTC), is an allowance provided by employers to salaried employees for travel with family during leave. Under Section 10(5) of the Income Tax Act, 1961 read with Rule 2B of the Income Tax Rules, the amount spent on travel is exempt from income tax, subject to specific conditions.

Block of 4 years

LTA exemption operates in fixed 4-year calendar blocks. The current block is 1 January 2026 - 31 December 2029 (the previous block was 2022-2025, which ended 31 December 2025). Within any block, an employee can claim LTA exemption for up to 2 journeys. One unclaimed journey from a block can be carried forward to the first calendar year of the next block, so during 1 January - 31 December 2026, you can potentially claim up to 3 journeys (2 fresh from 2026-29 + 1 carried from 2022-25). The carry-forward journey expires if not used by 31 December 2026.

Tax regime, old only

LTA exemption under Section 10(5) is available only under the old tax regime. Salaried employees who have opted into the new regime under Section 115BAC cannot claim LTA, even if they actually travelled with proper bills. Confirm your regime choice with payroll before booking expensive LTA-eligible trips.

What qualifies

• Domestic travel only. Within India. International travel is never exempt under LTA, even if part of a domestic-to-international itinerary.
• Travel must be with the employee. Family members cannot take a separate trip and claim LTA; the employee must travel with them. Exception: if the employee cancels at the last moment due to medical reasons, a pre-booked family journey may still qualify in practice (HR-dependent).
• Actual travel expenses only, not hotel, not food, not local sightseeing. Only the cost of reaching the destination and returning.
• Shortest route. If you travel from Mumbai to Chennai via Bangalore for sightseeing, exemption is limited to the shortest direct-route fare.

Travel mode and class limits

Rule 2B caps the exemption by travel mode:

• Air travel: economy-class fare on a national carrier (Air India) via the shortest route. If you fly a private airline, the exemption is still limited to what Air India economy would cost.
• Rail (where rail is available): AC 1st class fare via shortest route.
• Road (where rail not available): first-class / deluxe bus fare; or, if no bus is available, the actual taxi fare subject to cap.
• Origin - destination via mixed modes: exemption is limited to the AC 1st class rail fare for the full distance, even if you flew.

Family definition

Under Rule 2B, "family" means:

• Spouse
• Up to 2 children (born on or after 1 Oct 1998, earlier children have no limit)
• Parents, brothers, and sisters who are wholly or mainly dependent on the employee

The 2-children limit is notoriously strict. If you have 3 children, you can claim LTA for only 2 at a time; the third child's travel isn't exempt. Twins or multiple births count as one birth for this rule.

Carry-forward and the CY 2020-2021 LTC cash voucher

The LTC Cash Voucher Scheme introduced during the COVID pandemic (October 2020 to March 2021) allowed employees to claim LTA exemption without actually travelling, provided they spent 3 times the deemed LTA amount on goods/services attracting 12% or higher GST. That scheme expired on 31 March 2021 and was not extended. For FY 2025-26 onwards, actual travel with proof is the only path to Section 10(5) exemption.

Documents to retain

The employer's HR usually requires, for Form 12BB verification:

• Original travel tickets (boarding pass stubs, ticket PDFs, IRCTC e-ticket)
• Hotel bills (for travel proof, even though hotel costs are not exempt)
• A signed declaration with family members who travelled
• A consolidated LTA claim receipt (what our generator produces)

Common mistakes

• Claiming for international travel or for the international portion of a domestic-international trip. Not exempt.
• Claiming a third journey in a block. Maximum 2 per block.
• Claiming for hotel stays. Only travel cost qualifies.
• Claiming premium-class air fare. Exemption capped at economy.
• Claiming for a journey made without the employee. The employee must travel too.