Leave Travel Allowance (LTA)
Introduction
LTA is provided by employers to employees for travel within India. Exemption is allowed under Section 10(5) for journeys made by the employee and his family, subject to conditions.
Key Provisions
- Eligibility for Exemption
- Tax exemption is allowed for actual travel expenses incurred by the employee or family.
- Unspent allowance is taxable.
- Only domestic travel is covered; foreign travel is excluded.
- Number of Journeys
- Exemption allowed for two journeys in a block of four calendar years.
- Current block: 2022–2025.
- Unused exemptions can be carried over to the first year of the next block.
- Extent of Exemption
| Mode of Travel | Exemption Limit |
| Air Travel | Economy class airfare of the shortest route or actual expenses, whichever is less. |
| Rail Travel | First-class AC rail fare for the shortest route or actual expenses, whichever is less. |
| Recognized Public Transport | Deluxe or first-class fare for the shortest route or actual expenses, whichever is less. |
| Other Modes | Equivalent first-class AC rail fare for the shortest route (if connected by rail) or actual expenses, whichever is less. |
- Family Members Covered
- Spouse, dependent children (up to 2 children if born on or after 1-10-1998), dependent parents, and dependent siblings.
- Excludes grandparents, in-laws, or independent family members.
- Ineligible Expenditures
- Hotel stays, local transport, and meals are not eligible.
- Circuitous journeys are limited to the shortest route or farthest point by the shortest route.