Leave Travel Allowance (LTA)

Leave Travel Allowance, commonly known as LTA, is a tax-saving component offered by many employers in India. It is part of your salary package and allows you to claim expenses incurred on travel while on leave, subject to certain conditions.

While the concept seems simple, many employees often miss out on tax benefits due to lack of awareness or incorrect documentation. This blog explains everything you need to know about LTA – its rules, eligibility, exemptions, how to claim it, and tips to avoid rejection.

What is Leave Travel Allowance (LTA)

LTA is a type of allowance provided by employers to their employees, covering travel expenses when they take leave from work and go on a vacation within India. The allowance is eligible for tax exemption under Section 10(5) of the Income Tax Act, subject to fulfilment of certain conditions.

Key Point: LTA is only for domestic travel. International travel expenses are not covered under tax exemption.

Who is Eligible for LTA?

You can claim LTA if:

You are a salaried employee.

• LTA is part of your salary structure (CTC).
• You have taken leave from work for the travel.
• The travel is within India.
• You submit valid proof of travel.

What Expenses Are Covered Under LTA?

Only travel expenses are covered. The following are allowed:

• Railway fare
• Airfare (economy class for shortest route)
• Bus fare (recognized public transport)

The following are NOT allowed:

• Hotel bills
• Local transport (like cab, auto)
• Food and meals
• Sightseeing tickets
• Fuel expenses (if traveling by personal car)

Important: Only your own, spouse, children, and dependent parents or siblings are eligible. Friends or in-laws are not included.

How Often Can You Claim LTA?

You can claim LTA twice in a block of 4 calendar years.

Current LTA Block:

2022–2025 (1st Jan 2022 to 31st Dec 2025)

Example:
If you travel in 2023 and 2025, you can claim LTA for both those trips within the 2022–25 block.

If you miss claiming LTA in a block, you can carry forward one trip to the first year of the next block.

Tip: Plan your travels and LTA claims strategically to maximize tax savings.

LTA Claim Process – Step-by-Step

Here’s how to claim LTA from your employer:

1. Plan Your Trip

• Ensure travel is within India.
• Take official leave from your company.
• Choose modes of travel allowed under LTA.

2. Save All Travel Documents

• Air/train/bus tickets
• Boarding passes
• Travel invoices
• Proof of travel dates

3. Fill LTA Claim Form

• Most companies provide an LTA claim form.
• Mention travel details (dates, mode, family members, route).

4. Submit with Proof

• Attach scanned copies of tickets/invoices.
• Some companies may require hard copies or digital uploads on HRMS portals

5. Wait for Approval

• Once approved, your employer will process LTA and include it in payroll.
• The LTA amount becomes non-taxable.

Tax Exemption on LTA

LTA is exempt from tax only if you follow these rules:

Calculation Example

Let’s say:

• Your LTA in CTC = ₹25,000/year
• You travel from Mumbai to Manali with family by train
• Total train fare = ₹18,000

You can claim ₹18,000 as tax-free LTA. The remaining ₹7,000 (unclaimed) remains taxable unless another trip is made and claimed.

What Happens If You Don’t Travel?

If you receive LTA in your salary but don’t travel or submit proofs, the entire amount becomes fully taxable, and you pay tax based on your income slab.

So, if you’re in the 20% slab, you lose ₹5,000 in taxes on ₹25,000 LTA.

Plan one family trip in 2 years to avoid wasting LTA and tax benefit.

Can You Claim LTA Without Travel Proof?

No. LTA tax exemption is allowed only with valid proof of travel.
Submitting fabricated bills or fake tickets can be treated as tax evasion and result in penalties.

LTA and Income Tax Return (ITR)

• LTA is claimed through your employer.
• If not claimed during payroll, you can’t claim it directly in ITR.
• If already received and no proofs submitted, it is taxable and shown under “Salary Income” in ITR.

Can Both Husband and Wife Claim LTA?

Yes, if both are salaried employees, they can claim LTA separately.
But they can’t claim for the same travel expenses.

For example:

• Husband can claim LTA for Mumbai to Delhi
• Wife can claim LTA for another trip like Delhi to Jaipur

Or both can split family travel expenses proportionately and claim from their respective employers.

Best Practices to Maximize LTA Benefit

• Plan at least 2 family trips in a 4-year block
• Keep all tickets, invoices, boarding passes
• Use online booking for better tracking
• Claim LTA through employer payroll only
• Avoid encashment unless necessary
• Educate spouse (if salaried) about LTA sharing rules

FAQs on Leave Travel Allowance (LTA)

❓ Can I claim LTA for international travel?

No, LTA tax exemption is allowed only for domestic travel within India.

❓ What happens if I claim LTA without traveling?

The amount will be added to your taxable income, and you’ll pay tax as per your slab.

❓ Can I claim LTA for cab or taxi expenses?

No, only train, air, or public bus fare is allowed under LTA.

❓ How many children can I include in LTA?

LTA exemption is allowed for only two children born after October 1, 1998.

❓ Can I claim LTA for multiple journeys in a year? Yes, but only two journeys can be claimed in a block of 4 years