LTA Exemption Rules: Block of 4 Years & How to Claim

What LTA Exemption Covers

Section 10(5) exempts the value of travel concession or assistance received by an employee for proceeding on leave to any place in India, for themselves and their family, subject to conditions. Crucially, the exemption is limited to the actual cost of travel by the shortest route to the destination — and only for the following modes:

For the connected rule or filing step, see Leave Travel Allowance Exemption Calculator.

• Air travel: Economy class fare of the national carrier (Air India) by the shortest route, or actual amount spent, whichever is lower
• Rail travel: AC First Class fare by the shortest route, or actual amount spent, whichever is lower
• Other modes (where rail isn't connected): First class or deluxe class fare of a recognized public transport system, or AC First Class rail fare for the equivalent distance, whichever is lower

The Block-of-4-Years Rule

LTA exemption can be claimed for two journeys in a block of four calendar years (not financial years). The current block years are set by the government — for example, 2022-2025 is one such block. If you don't use both exemptions within a block, one unused exemption can be carried forward to the first year of the next block, provided it's used in that very first year (this is sometimes called the 'carry-over concession').

Family Members Covered

LTA exemption covers travel for the employee and their family, defined as: spouse, children (with restrictions — generally not more than two children born after 1 October 1998, though children born before this date and multiple births are exempted from this restriction), and dependent parents, brothers, and sisters.

Domestic Travel Only

LTA exemption is available only for travel within India. International travel, even if part of a longer trip that includes a domestic leg, does not qualify for the domestic portion's exemption beyond what would have been incurred for travel to the farthest domestic point on the same route.

Documents Required

• Travel tickets (flight/train/bus) showing dates, names of travelers, and amounts
• Boarding passes (for air travel, as proof of actual travel undertaken)
• A declaration to the employer (in the prescribed format) confirming the journey details
• Note: Since the abolition of the requirement to submit physical proofs to the income tax department directly (employers retain these for their records and TDS computation), maintain copies for at least the limitation period in case of a query

Old Regime vs New Regime

LTA exemption under Section 10(5) is not available under the new tax regime. If you opt for the new regime, the LTA component of your salary is fully taxable, just like basic salary.

Common Mistakes

• Claiming LTA for a trip that includes international travel without restricting the claim to the domestic leg
• Including hotel and food bills in the LTA claim
• Not tracking which block years exemptions have already been used in
• Claiming LTA in the new tax regime