HomeTravel NewsHere’s why you should claim LTA and how to do it

Here’s why you should claim LTA and how to do it

Leave Travel Insurance (LTA) can be claimed for 2 trips in a block of 4 calendar years.

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By CNBCTV18.com May 11, 2022, 3:19:58 PM IST (Published)

Here’s why you should claim LTA and how to do it
Leave travel Allowance or LTA is one of the best tax saving tools available to employees. LTA is provided by employers for their employees’ travel expenses. Employees can claim LTA for two trips in a block of four calendar years. In case no claim is made in a block, individuals can carry it over to the next block.


Employees can be travelling alone or with family to avail the benefit. However, only the travel costs are paid by the employer and not the other expenses such as food, shopping, entertainment, etc. The amount paid under LTA is tax-free under Section 10 (5) of the Income Tax Act, but there are some rules related to the exemption.

Why should you claim LTA?

LTA is a great option to maximize your tax-saving. However, LTA depends on the salary structure offered by the employer. Therefore, it is advisable to check the salary structure to make sure that LTA is available to you. In case you are eligible to claim the LTA and have incurred actual travel expenses which can be claimed, you must claim LTA.

It is advisable to claim LTA when your travel expenses meet the LTA threshold specified in your CTC. Making smaller claims will exhaust your option to claim LTA and hinder tax saving.

How to claim LTA?

The process to claim LTA is usually specific to the employer. Generally, employers announce the due date within which LTA can be claimed by the employees and may require employees to submit proof of travel such as tickets, boarding pass, invoice provided by travel agent, etc. and a mandatory declaration. Though, it is not considered mandatory for employers to collect proof of travel, it is advisable for employees to keep copies of the record to submit to employer based on LTA policy of the company or to tax authorities on demand.

LTA conditions

  1. Claims can be made only for actual journeys to claim the tax exemption.

  2. Only domestic travel (within India) is considered for exemption.

  3. The exemption for travel is for the employee travelling alone or with his family. ‘Family’ includes the employee’s spouse, children and wholly or mainly dependent parents, brothers, and sisters of the employee.

  4. An exemption is not available for more than two children of an employee born after October 1, 1998. Children born on the specified date do not have any restriction.

  5. The exemption is available only on the actual travel costs i.e., the air, rail or bus fare incurred by the employee. The LTA amount is subject to the salary structure provided by the employer.

  6. One can claim LTA only twice in a block of four years. In case of no claim, it can be carried forward to the next block.

  7. Only the amount paid for travel expenses under LTA is eligible for exemption. For instance, if LTA granted by the employer is Rs 40,000 and the actual cost of travel is Rs 30,000, then only Rs 30,000 will be eligible for tax exemption and the balance Rs 10,000 will be included in the taxable salary income.

  8. Individuals who have opted for the new tax regime cannot claim LTA.


LTA eligible exemptions

  1. Travel by air - Exemption is allowed for ticket fares of a national airline's economy class when the destination is connected by air.

  2. Travel by train – If the destination is also connected by trains, the exemption is allowed for AC first-class tickets.

  3. Travel by other modes of transport – an amount equivalent to first-class, deluxe, or AC first-class fare, whichever is lower, can be claimed for exemption under LTA if the destination is not connected by either rail or air.

  4. The LTA deductions are considered only for the shortest route to the destination and back.




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