Leave Travel Allowance Is Already in Your Salary, Here Is How Much You Can Actually Use
Leave Travel Allowance is a conditional tax exemption built into salary structures. Whether it reduces taxable income or becomes fully taxable depends on how it is claimed, the tax regime chosen, and compliance with Section 10(5), not simply on whether travel has taken place.
LTA Full Form in Salary – What Does LTA Actually Mean in Your Payslip?
LTA stands for Leave Travel Allowance, also known as Leave Travel Concession. It is a salary component provided by employers to reimburse domestic travel expenses incurred by an employee and their eligible family members.
How LTA Works in Salary: Eligibility, Calculation, and Deductions
Leave Travel Allowance is one of those salary components that looks simple on paper but often creates confusion at the time of tax filing.
| LTA Details | What It Means |
| LTA Block Year | LTA can be claimed only within a fixed four-year government block. The current block runs from 2026 to 2029. |
| LTA Eligibility | Only salaried employees with LTA in their salary structure can claim it for domestic travel taken on approved leave. |
| LTA Exemption Limit | Exemption applies only to actual domestic travel fares for the shortest route. |
| LTA Claim Rules | LTA covers eligible family members and is available only under the Old Tax Regime. |
| How Much LTA Can Be Claimed | The claim is limited to the lower of the actual travel cost or the LTA amount in salary. |
| LTA Deduction | Under Section 10(5) of the Income Tax Act, only the eligible LTA amount is exempt from tax. Any unclaimed or excess LTA is added to income and taxed as per the applicable slab. |
How to claim LTA without travelling
Leave Travel Allowance cannot be claimed without actual travel under the Income Tax rules. LTA exemption is allowed only when domestic travel is undertaken, and valid travel proof is available.
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LTA Eligibility – Who Can Claim LTA and Who Cannot
- You must be a salaried individual, whether resident or non-resident, with Leave Travel Allowance included in your salary structure by your employer.
- The travel must be undertaken within India, either by you or along with eligible family members such as your spouse, children, dependent parents, or dependent siblings.
- Actual travel is mandatory, and valid proof, such as tickets, must be maintained to claim the exemption.
- Only economy class travel by air, rail, or public transport using the shortest route is eligible, while expenses on accommodation, food, or local travel are excluded.
- The exemption is limited to the lowest of the actual travel cost incurred, the LTA amount provided by the employer, or the eligible economy fare of the national carrier on the shortest route.
- LTA exemption can be claimed for a maximum of two journeys in a four-year block, with one unclaimed journey allowed to be carried forward to the first year of the next block.
- If you opt for the New Tax Regime, the LTA exemption is not available, and the entire allowance becomes taxable.
LTA Claim Rules You Must Know
- LTA exemption can be claimed for a maximum of two journeys within a four-year block period.
- The exemption covers the employee along with eligible family members, including the spouse, children, and wholly dependent parents or siblings.
- Actual travel must be undertaken and supported with valid proof, such as tickets.
- Employees are required to submit Form 12BB along with relevant travel documents to their employer before filing the income tax return.
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- Any LTA amount exceeding the exempt limit is fully taxable.
LTA Exemption Limit
The biggest confusion around LTA is not whether it is tax-free, but how much of it actually qualifies for exemption.
The exempt Leave Travel Allowance amount is calculated as the lowest of three values.
These include the LTA received from the employer, the actual eligible travel cost incurred using economy class fares only, or the economy class airfare of the national carrier, such as Air India, for the shortest route.
There is no fixed upper monetary cap on Leave travel allowance exemption limit under section 10 as the eligible amount depends on the employer-provided allowance and valid travel proof. Expenses related to food, accommodation, local travel, or sightseeing are not eligible for exemption.
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- Leave travel allowance exemption in the new tax regime
Under the New Tax Regime, the LTA exemption is not available. The entire LTA amount received becomes fully taxable, regardless of travel proof.
- Leave travel allowance exemption in the old tax regime
Under the Old Tax Regime, LTA exemption continues to be available subject to conditions under Section 10(5). Valid travel proof and adherence to block year rules are mandatory.
How Much LTA Can Be Claimed in 2026
In 2026, the amount of Leave Travel Allowance that can be claimed depends on whether you are utilising a carried-forward journey from the previous block or claiming a journey from the new block period starting in 2026.
Key LTA Claim Rules for 2026
- You can claim LTA for one journey in 2026 if you are carrying forward an unutilised exemption from the 2022 to 2025 block.
- This carried-forward journey must be completed within the calendar year 2026, failing which the exemption will lapse.
- Claiming a carried forward journey in 2026 does not reduce your eligibility to claim two fresh journeys in the 2026 to 2029 block period.
LTA Amount Limit in 2026
- There is no fixed monetary cap on how much LTA can be claimed.
- The exemption is limited to the lowest of the following:
- LTA amount provided by your employer.
- Actual eligible travel expense incurred.
- Economy class airfare of the national carrier, first class rail fare, or equivalent public transport fare for the shortest route.
How to Claim LTA
How to claim leave travel allowance benefits from my employer?
You must undertake domestic travel during approved leave and submit valid travel proof, such as tickets and boarding passes, to your employer through Form 12BB. The employer adjusts the exempt LTA amount in your salary before issuing Form 16.
Step-by-Step LTA Claim Process
- Verify that LTA is part of your salary structure and ensure the travel is undertaken within India during approved leave.
- Travel with eligible family members, if applicable, and preserve valid proofs such as tickets, boarding passes, and invoices. Expenses on food, hotel stay, sightseeing, or local travel must be excluded.
- Fill the employer-prescribed LTA or Form 12BB with travel details, including dates, destination, mode of transport, and cost, and attach the required proofs.
- Submit the documents within the employer’s deadline, usually before the end of the financial year or as per the internal payroll policy.
- The employer reviews the claim and reflects the exempt amount in payroll and Form 16.
- If LTA is not adjusted by the employer, it can be claimed directly while filing the income tax return under Exempt Income, Section 10(5).
Which are the top companies offering easy leave travel allowance reimbursement services
Most employers process LTA through integrated payroll and HR platforms that allow digital proof submission and automated verification. The ease of reimbursement depends on internal company policy, not on the service provider.
Leave Travel Allowance Calculation – Example
LTA exemption is calculated as the lowest of three amounts. The exempt amount equals the minimum of the following:
- LTA amount received from the employer.
- Actual travel cost incurred for eligible domestic travel using economy class fares only.
- Economy class airfare of the national carrier for the shortest route, even if the journey was completed by train or road.
This calculation applies per eligible journey and is limited to two journeys in a four-year block period.
| Scenario | Employer LTA | Actual Travel Cost | Airfare Limit | Exempt Amount |
| Employee spends less than LTA | ₹32,000 | ₹26,000 | ₹30,000 | ₹26,000 |
| LTA lower than travel cost | ₹28,000 | ₹42,000 | ₹45,000 | ₹28,000 |
| Family train journey (4 members) | ₹55,000 | ₹72,000 | ₹60,000 | ₹55,000 |
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Leave Travel Allowance – FAQs
Travel insurance is not mandatory for claiming LTA, but domestic plans can provide medical and baggage protection during travel. Insurance premiums do not qualify for the LTA exemption and are treated separately.
Leave Travel Allowance is a salary component that reimburses domestic travel expenses incurred during official leave. Tax exemption is allowed under Section 10(5) for eligible journeys when conditions are met.
LTA can be claimed for a maximum of two journeys within a four calendar year block. One unutilised journey can be carried forward to the first year of the next block period.
LTA exemption is available only under the Old Tax Regime and applies strictly to domestic travel. The employee must be on approved leave and actual travel proof is mandatory.
There is no fixed monetary cap on LTA exemption. The exempt amount is limited to the lowest of actual travel cost, employer-provided LTA, or the eligible fare for the shortest route.
Leave Travel Allowance is a salary component that reimburses domestic travel expenses incurred during approved leave. It offers tax exemption on eligible travel fares under Section 10(5) of the Income Tax Act.
