Have you ever wondered how leave travel allowance (LTA) affects your salary and taxes? LTA is a benefit provided by employers that helps cover travel expenses – but many are unsure about how it works. In India, LTA is part of your CTC (Cost to Company), and according to the Income Tax Act – you can claim tax exemption on LTA for domestic travel.
However, not everyone fully understands how to claim it properly.
This guide will break down LTA calculation, its tax exemptions, and how you can make the most of this benefit.
What is Leave Travel Allowance (LTA)?
LTA full form = Leave Travel Allowance
So, what is LTA allowance meaning?
It is an allowance provided by employers in India to – cover travel expenses when employees take trips within the country.
The primary benefit of LTA is that it is partially exempt from tax – making it a beneficial part of your salary. It can be claimed –
- During an employee’s leave
- Following service termination
- After retirement
So, what is LTA in salary? It’s essentially a travel allowance included in your salary package – which you can claim when you travel within India.
Basically, LTA in salary is a component provided explicitly for travel purposes. And, you can only claim it when you meet specific conditions set by the Income Tax Act.
Note:
Leave travel Allowance (LTA) is also known as Leave Travel Concession (LTC).
Benefits of Leave Travel Allowance
Leave Travel Allowance (LTA) offers several benefits to employees in India. Here are some key benefits.
- Tax savings: LTA provides tax exemptions on travel expenses – which helps employees reduce their taxable income. This applies when travelling within India.
- Encourages travel: Leave Travel Allowance (LTA) motivates employees to take trips with their family by offering a tax break on travel expenses. This encourages relaxation and quality family time.
- Covers multiple travel modes: LTA can be used for various modes of travel, including – air, rail, or road. This makes it flexible for different travel plans.
- Applicable to family members: LTA can be claimed not only for the employee but also for their – spouse, children, and dependent parents or siblings.
- Carry forward benefit: If the employee cannot claim LTA in a given block – they can carry forward one journey to the next block. It guarantees that they don’t miss the exemption.
- Simplified claim process: The LTA claim process is straightforward. It only requires submission of travel-related documents such as tickets or boarding passes to the employer.
Note:
Leave travel Allowance (LTA) can only be claimed for actual travel costs and does not cover expenses like – local transport, sightseeing, meals, or hotel stays.
LTA Exemption Section – Leave Travel Allowance
The LTA exemption section under the Income Tax Act is Section 10(5) – which provides tax relief on the leave travel allowance component of your salary.
Under this section – the cost of travel incurred by the employee and their family for travel within India is exempt from tax – provided the employee can furnish proof of travel.
LTA Block Year – Leave Travel Allowance
An LTA block year is a four-year period set by the government for claiming Leave Travel Allowance (LTA). It differs from the financial year and is used specifically for tax exemptions on travel.
The concept of LTA block year began in 1986 with the first block of 1986 to 1989. Since then – each block has been for four years – such as 1990 to 1993, 1994 to 1997, and so on.
So, what’s the rule about LTA block year?
The tax exemption can be claimed only for two trips in the LTA 4 year block. The current LTA cycle runs from 2022 to 2025 – and employees are allowed to claim the tax exemption for travel made during this period.
Who Can Claim LTA? – Leave Travel Allowance
Now, let’s understand the LTA eligibility India.
The LTA eligibility criteria specify that – the exemption can be claimed only by salaried employees who receive this benefit as part of their salary package.
It can only be claimed for travel within India. LTA eligibility India rules also stipulate that the journey must be undertaken – during a period when you are on leave from work.
LTA Claim Rules – What are the Conditions for Claiming LTA?
To claim Leave Travel Allowance (LTA) – employees must meet specific conditions outlined by the Income Tax Act in India. Let’s take a look at them.
- Domestic travel only: Leave Travel Allowance (LTA) can only be claimed for travel within India. International trips are not eligible for LTA exemption.
- Valid proof of travel: Employees must provide valid travel documents like – tickets and boarding passes when claiming LTA. Without these, the exemption is not granted.
- Family coverage: LTA can be claimed for the employee and their family. The family includes the employee’s spouse – up to two children – and dependent parents or siblings.
- Restriction on number of children: LTA tax exemption is available for two children if they were born after October 1, 1998. However, children born before this date do not have this restriction. In cases of multiple births after having one child – the exemption applies without limitation.
- Exemption for travel costs only: LTA only covers travel expenses – such as flight or train tickets. It does not cover – accommodation, meals, local transportation, or sightseeing.
- No cash benefit without travel: Leave Travel Allowance (LTA) cannot be claimed if the employee does not travel. If LTA is received without actual travel – the amount becomes fully taxable.
- Two claims in a four-year block: Employees can make a claim twice in LTA 4 year block – based on the block year defined by the government.
These LTA claim rules guarantee that the benefits are properly used for tax exemptions on genuine travel expenses within India.
How Much LTA Can Be Claimed?
Wondering what is the LTA tax exemption limit?
Well, the exemption is limited to the actual travel cost for the shortest route. Any additional expenses related to – accommodation, food, or sightseeing are not eligible for tax exemption. The exemption amount is also restricted to the LTA allowance provided by the employer.
Take this example:
If your employer offers an LTA of ₹20,000 but your actual travel expenses are ₹15,000 – you can only claim ₹15,000 as the exemption. The remaining ₹5,000 will be considered part of your taxable income. This means only the actual fare spent on travel is eligible for tax relief under LTA.
Note:
The maximum LTA exemption you can claim depends on the mode of travel and actual travel costs.
Leave Travel Allowance Calculation
Employers provide LTA to employees based on their job roles – and the amount can differ across companies. Understanding the LTA calculation on basic salary is important for employees.
Let’s take an example:
An employee’s LTA component in salary is ₹50,000. They plan a trip and end up spending ₹45,000 on travel costs. In this case – the employee can claim the full ₹45,000 as the exemption because it is below the limit set by the employer. If they had spent ₹60,000, they would only be able to claim ₹50,000 as that is the cap established by their employer. Therefore, only the amount spent on travel within the employer’s LTA limit is eligible for tax exemption.
Note:
The tax exemption for Leave Travel Allowance (LTA) is not available if you choose the new tax regime.
How to Claim LTA?
Wondering how can I claim LTA? Well, it is a simple process. Here are the steps to claim Leave Travel Allowance:
- Check eligibility: Make sure you are eligible for LTA as per your employer’s policy. If you are eligible – you can check the LTA in salary slip. LTA usually applies to travel within India for you and your family.
- Plan your trip: Travel to a destination within India during your leave. Keep all travel-related documents handy.
- Collect proof of travel: Obtain valid proof of travel, such as train or flight tickets, boarding passes, and any other relevant documents.
- Fill out the LTA claim form: Complete the LTA claim form provided by your employer. Include details about your trip, travel dates, and accompanying family members.
- Submit required documents: Attach your proof of travel and the completed claim form. Make sure all documents are accurate and complete.
- Keep track of the due date: Every employer announces the due date by which LTA claims must be submitted. Make sure to submit your claim before this deadline.
- Follow up: After submission, follow up with your HR or finance department to check the status of your claim.
Once approved, the LTA reimbursement will be adjusted against your taxable income – providing you with the benefit.
Required Documents for Claiming Tax in Leave Travel Allowance
To claim tax exemption on Leave Travel Allowance (LTA) – you need to provide specific documents. Here are the required documents:
- LTA declaration form: Fill out and sign the LTA declaration form provided by your employer.
- Travel bills: Provide any relevant travel bills or invoices that detail the expenses incurred during your trip.
- Travel tickets: Keep the original tickets for your journey, including flights, trains, or buses.
- Family member details: Include information about family members who travelled with you if claiming for them.
Having the LTA declaration form and documentation ready will help you make the claim without any issues.
Note:
In some cases – you may need to submit a request letter for LTA claim – especially if you are claiming after the travel has occurred.
Also Read - How to File ITR for Salaried Person
Carrying Forward Unclaimed LTA – Leave Travel Allowance
If you haven’t claimed your Leave Travel Allowance (LTA) exemption for one or two journeys within a four-year block – you can carry forward one unclaimed exemption to the next block.
However, it’s important to use this carried-over exemption in the first year of the new block. This allows you to take advantage of your entitled benefits even if you missed claiming them previously.
Let’s understand this with the help of an example:
Let’s say an employee has a four-year LTA block from 2022 to 2025. During this block, the employee only claimed LTA for one trip in 2023 and didn’t claim for two other eligible journeys in 2022 and 2024.
According to the rules – the employee can carry forward one unclaimed exemption to the next block, which will be from 2026 to 2029.
For example, if the employee decides to carry forward the unclaimed exemption from the trip in 2022 – they must use this exemption within the first calendar year of the new block – specifically by the end of 2026. If they don’t use it within that year – the opportunity to claim that carried-over exemption will be lost.
LTA Exemption Rules
LTA tax exemption rules dictate how much of your travel expenses can be claimed under Leave Travel Allowance. These rules vary based on the mode of transport used. Here’s a breakdown:
| Mode of Travel | LTA Tax Exemption Limit |
| Air | Lower of:- Actual travel expenses- Economy-class fare of a national carrier (e.g., Air India) |
| Rail | If rail services are available, lower of:- Actual travel expenses- Air-conditioned first-class rail fare |
| If No Rail Service (No Public Transport is Available) | If no public transport is available, lower of:- Actual travel expenses- First-class rail fare for the journey |
| If No Rail Service (Public Transport is Available) | If public transport is available, lower of:- Actual travel expenses- First-class or deluxe-class fare |
Note: All claims should be based on the shortest route to the destination.
- Air travel
You can claim the lower of the actual travel expenses or the economy-class airfare of a national carrier for the shortest route to your destination.
- Rail travel
When traveling by train – if rail services are available – you can claim – either the actual expenses incurred – or the fare for an air-conditioned first-class ticket for the shortest route to your destination.
- If rail service is not available
- No recognised public transport: If there is no recognised public transport – you can claim the lower amount between your actual expenses – or the first-class rail fare as if the journey were made by train.
- Recognised public transport exists: If there is public transport available – you can claim either your actual expenses – or the fare for first-class or deluxe-class transport for the shortest route to your destination.
Understanding these rules helps you make the most of your travel benefits while ensuring compliance with tax regulations.
Limitations of Leave Travel Allowance (LTA)
Here are some key limitations of Leave Travel Allowance:
- Domestic travel only: LTA is applicable solely for travel within India. It does not cover any international journeys.
- Eligible modes of transport: The allowance can only be claimed for specific modes of travel, such as – air, rail, or recognised public transport.
- Claim restrictions: Employees can only claim LTA for actual travel expenses incurred.
- Limited claims: Employees can claim LTA benefits only twice during a block of four years.
Also Read - Monthly Salary Slip Format and Samples for Employees and Employers
LTA in Income Tax Return
Many people ask, can LTA be claimed in ITR? Yes, it can. However, it’s important to submit your LTA claim through your employer before the end of the financial year. If you fail to claim it through your employer – you can still declare it in your income tax return.
To understand how to claim LTA in income tax return – follow these steps:
- Make sure that your employer processes your LTA tax exemption.
- If you haven’t claimed the exemption via your employer, declare it in your ITR under exempted income.
- Submit the necessary proof of travel expenses to support your LTA income tax claim.
For those wondering how to claim LTA in IT return, the process is the same. You need to make sure that all travel documents are in place, and you declare the exemption correctly in your tax filings.
LTA Deduction and Tax Implications
One common query is whether LTA deduction is allowed. The deduction can be claimed under Section 10(5) of the Income Tax Act – but it only applies to travel expenses.
So, is LTA deducted from salary?
The LTA component is not deducted but is a part of your salary structure. If you do not claim LTA – the full amount will be taxable.
In some cases, employees may also wonder about LTA tax deductions. The deduction refers to the amount exempt from tax due to your LTA claims. However, only the travel component is tax-deductible – not the entire LTA.
LTA Bill Format – Leave Travel Allowance
Here is a simple LTA bill format you can use:
Subject: Leave Travel Allowance Claim
Travel Details:
- Journey From: [Departure City]
- Journey To: [Destination City]
- Travel Date: [Date of Travel]
- Mode of Transport: [Air/Rail/Bus]
- Ticket Number: [Ticket Number]
Expenses:
| Description | Amount (INR) |
| Air/Rail Ticket | [Amount] |
| Other Expenses (if any) | [Amount] |
| Total Amount Claimed | [Total] |
Attachments:
- Original Travel Tickets
- LTA Declaration Form
- Any other relevant documents
Declaration:
I hereby declare that the details provided above are true and correct. I request reimbursement of the Leave Travel Allowance as per the company policy.
Signature:
[Your Name]
[Employee ID]
Leave Travel Allowance When Traveling to Multiple Destinations
The income tax rules allow employees to claim exemptions for travel costs incurred when going on leave to various places within India. When considering the mode of transport – it’s essential to look at both the starting point (origin) – and the endpoint (destination). This guarantees that the route taken is the shortest available.
So, if you visit multiple destinations during a single vacation – you can only claim an exemption for the travel expenses from – the starting point to the farthest destination – following the shortest route.
Leave Travel Allowance Exemption for Holiday Vacations
Some organisations strictly interpret the income tax regulations and permit employees to claim Leave Travel Allowance (LTA) only when they take leave for their travel. This means that – claims for trips taken on official holidays or weekends may be denied. So, you should be aware of your company’s policy on LTA claims to avoid any misunderstandings.
LTA Rules for Private Company
If you work in the private sector, you may have specific company policies related to LTA rules for private companies. Generally, private companies follow the guidelines set out by the Income Tax Act – but some may have additional rules about how and when you can claim LTA.
For example, some companies may have policies about how many leaves required to claim LTA. Typically, you must be on leave for a few days to claim LTA – but the exact number of days may vary by company policy.
LTA for Foreign Travel and International Travel
A frequently asked question is – can LTA be claimed for international travel? Unfortunately, the answer is no. The LTA exemption applies only to travel within India. LTA for international travel is not covered under the tax exemption rules.
What is the LTA Exemption in the New Tax Regime?
In the new tax regime, Leave Travel Allowance (LTA) exemption is not available. Unlike the old regime – where taxpayers could claim LTA for travel expenses incurred during domestic trips – the new regime simplifies tax calculations by eliminating several exemptions and deductions. Therefore, employees cannot benefit from LTA exemptions if they opt for the new tax structure.
Also Read - Leave Application for Festival in Office with Format & Samples (2024)
Wrapping Up
Understanding Leave Travel Allowance (LTA) is essential for every employee seeking to maximise their benefits. By knowing how to calculate and claim LTA, you can make the most of this valuable allowance during your travels. Remember to keep all necessary documents ready and follow the rules for claiming them.
And, if you’re looking for exciting opportunities in the tech field – don’t forget to explore Hirist. It’s an excellent IT job portal where you can easily find the best tech jobs in India tailored to your skills and requirements!
FAQs
What is LTA allowance?
LTA allowance is a benefit given by employers to cover travel costs for employees and their families.
Is there any difference between LTA and LTC?
Yes, LTA (Leave Travel Allowance) is a salary component for travel expenses – while LTC (Leave Travel Concession) is a government benefit for employees travelling on leave.
How to claim LTA without travelling?
You cannot claim LTA without travelling. Leave Travel Allowance is only for actual travel expenses and cannot be claimed otherwise.
What can be claimed in LTA?
Only actual travel expenses for journeys within India can be claimed in LTA.
How many times LTA can be claimed?
LTA can be claimed twice in a block of four years.
Can I claim LTA every year?
No, LTA can only be claimed twice during a four-year block.
What is the full form of LTA in salary?
The full form of LTA is Leave Travel Allowance.
Is boarding pass required for claiming LTA?
Yes, you need a boarding pass for LTA claim.
How to make fake LTA bills?
Well, it is unethical and illegal to create fake LTA bills, and we do not encourage any such activities.
Is LTA part of 80C?
No, LTA is not part of Section 80C deductions under the Income Tax Act
How many leaves required to claim LTA?
Are you wondering – how many days leave required to claim LTA? Well, there are no specific leave requirements; travel can be claimed during any leave period.
How to make LTA claim for family members?
Include details of family members travelling with you in the LTA claim form submitted to your employer.
LTA claim for parents: Can I claim it?
Yes, you can claim LTA for dependent parents who travel with you.
What is the LTA allowance limit?
Want to know the maximum LTA limit? Well, the LTA allowance limit varies by employer, but it is based on actual travel expenses incurred.