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Guide · Salary & Deductions

LTA Exemption — 2 Journeys, Old Regime Only

Leave Travel Allowance under Section 10(5): the 2-journey rule, the current 2026-29 block, which travel fares qualify, carry-forward, and exactly how salaried employees claim it in the old regime.

Written by
TaxClue Income-Tax Desk
Updated
18 August 2026
Reading time
6 min
Questions
15 answered
  • Updated August 2026
  • CA Reviewed
  • Salaried Old-Regime Benefit
Quick Answer

LTA (Leave Travel Allowance) exemption under Section 10(5) lets a salaried employee exclude the actual travel fare for domestic journeys from taxable salary — up to 2 journeys in a block of 4 calendar years, and only under the old tax regime. It covers the fare (air, rail or bus) for the employee and family on the shortest route within India — hotel, food, sightseeing and local conveyance are never covered. Travel from 1 Jan 2026 falls in the new 2026-29 block.

LTA is one of the few salary perks the new regime removes

The new tax regime (default from FY 2023-24) disallows LTA along with HRA, and most Section 10 salary exemptions. If your CTC has a meaningful LTA component and you actually travel, that alone can tilt the old-vs-new decision. Compare both before you pick.

What qualifies

Which Travel Fare Is Exempt Under LTA

Only the cost of travel on the shortest / nearest practicable route between origin and destination is exempt, capped by the mode-wise benchmark below (Rule 2B). LTA is limited to the lower of the actual LTA received and the eligible fare.

Mode of travelEligible exempt fareCondition
Air travelEconomy classNational-carrier economy fare on the shortest route
Rail (place connected by rail)AC First ClassAC First Class rail fare of the shortest route
Road, place not connected by rail (public transport)Deluxe / 1st class busFirst-class or deluxe fare of recognised public transport
Road, place not connected by rail (no public transport)AC 1st Class rail equiv.As if the distance were covered by AC First Class rail
Private car / taxiAC 1st Class capCapped at the AC First Class rail fare for that route

Only transport cost is exempt. Hotel, meals, sightseeing, local cabs, visa and travel insurance are never covered.

The whole family can travel — but you must travel too

LTA covers the employee plus spouse, up to 2 children (born after 1 Oct 1998), and dependent parents, brothers and sisters. But the exemption applies only for journeys the employee actually undertakes — if only your family travels and you stay back, that journey is not exempt.

The 4-year clock

LTA Block Years & Carry-Forward

LTA runs on government-fixed blocks of 4 calendar years — not financial years. You can claim exemption for a maximum of 2 journeys in a block. For FY 2025-26, a journey taken up to 31 December 2025 falls in the 2022-25 block; a journey from 1 January 2026 falls in the new 2026-29 block.

BlockPeriod (calendar years)JourneysCarry-forward
Previous blockJan 2018 – Dec 202121 unused → next block
Just endedJan 2022 – Dec 202521 unused → usable in 2026
Current blockJan 2026 – Dec 20292 (+ any carried-forward)1 unused → next block
Next blockJan 2030 – Dec 203321 unused → next block

Blocks are set by the calendar year of travel, independent of your ITR / financial year.

Use a carried-forward journey in the FIRST year

If you used only 1 of your 2 journeys in the 2022-25 block, you may carry over 1 journey — but it must be availed in the first calendar year of the next block, i.e. during 2026. A carried-forward journey used in 2026 does not eat into the 2 journeys otherwise available for the 2026-29 block.

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The catch

LTA Is Available Only Under the Old Regime

The new tax regime is the default and offers lower slab rates, but it removes LTA, HRA and most salary exemptions. To claim LTA you must opt for the old regime when filing.

Old

Old regime — LTA available

  • LTA fare exempt u/s 10(5), 2 journeys / block
  • HRA u/s 10(13A) and 80C, 80D etc. allowed
  • Standard deduction Rs 50,000 (salaried)
  • Best when travel + rent + deductions are high
New

New regime (default) — no LTA

  • LTA and HRA not available
  • Most Section 10 salary exemptions removed
  • Standard deduction Rs 75,000 (salaried)
  • Rebate u/s 87A up to Rs 12L taxable income
  • Simpler — best with little travel / few deductions
Worked example

How the LTA Exemption Is Computed

Exemption = lower of (actual LTA received, eligible fare on the shortest route). Any excess LTA over the eligible fare is added to taxable salary. Here are two typical cases.

Fare < LTA received

LTA received in CTCRs 60,000
Actual eligible fareRs 42,000
Exempt (lower of two)Rs 42,000
Taxable LTARs 18,000

Fare > LTA received

LTA received in CTCRs 40,000
Actual eligible fareRs 55,000
Exempt (capped at LTA)Rs 40,000
Taxable LTARs 0

The exemption can never exceed the LTA actually paid by the employer, nor the fare actually spent. See our income-tax slabs to value the saving at your slab rate.

✓LTA is worth claiming if

  • You are on the old regime and have an LTA component in CTC
  • You travel domestically with family within a block
  • You keep tickets, boarding passes and a travel declaration

!Reconsider if

  • The new regime saves you more overall
  • You did not travel (LTA becomes fully taxable)
  • Your trip was international or fare exceeds the shortest-route cap
Step by step

How to Claim LTA Exemption

  1. 1Pick old regimeLTA is disallowed in the new regime
  2. 2Travel & keep billsDomestic trip; save tickets and boarding passes
  3. 3Fill Form 12BBDeclare LTA travel proof to your employer
  4. 4Employer verifiesExemption reflected in Form 16 / TDS
  5. 5Confirm in ITRExempt LTA shown; taxable balance, if any, added
  • Old regime selected before filing
  • Original travel tickets (air / rail / bus)
  • Boarding passes for the journey
  • Travel declaration / Form 12BB to employer
  • Proof that the employee travelled
  • Shortest-route fare within the eligible cap
  • LTA component identified in salary slip / CTC
  • Journey counted against the correct 4-year block
No travel means no exemption

LTA is exempt only against actual travel. If you receive LTA but do not travel (or cannot produce proof), the entire LTA is taxable as salary. LTA also does not cover foreign travel or non-fare costs like hotels and food.

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Sources
  1. Section 10(5) & Rule 2B: incometax.gov.in
  2. New vs old regime (default new): Finance Act 2023 & Budget 2025
  3. Standard deduction Rs 75,000 (new) / Rs 50,000 (old): Budget 2025
  4. Block years 2022-25 & 2026-29: CBDT block-year notifications

Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position or speak to our CA team before you act on it.

People also ask

LTA Exemption — Frequently Asked Questions

Short, direct answers to the 15 questions readers ask most on this topic.

LTA exemption is available for a maximum of 2 journeys in a block of 4 calendar years. There is no per-year limit — you may use both journeys in the same year, but that exhausts the block. For FY 2025-26, travel up to 31 December 2025 counts in the 2022-25 block and travel from 1 January 2026 counts in the new 2026-29 block.

The block just ended was 1 January 2022 to 31 December 2025. The current block runs from 1 January 2026 to 31 December 2029. Blocks are set by the calendar year of travel, not the financial year, so a March 2026 trip falls in the 2026-29 block even though it is in FY 2025-26.

No. LTA exemption under Section 10(5) is not available in the new tax regime, which is the default from FY 2023-24 onwards. It is allowed only under the old regime. If you opt for the new regime for its lower slab rates and Rs 75,000 standard deduction, LTA in your CTC becomes fully taxable.

Section 10(5), read with Rule 2B, exempts the travel concession or assistance (LTA/LTC) received by an employee for travelling with family, subject to conditions — domestic travel only, shortest-route fare, and a maximum of 2 journeys per 4-year block. Any LTA over the eligible exempt fare is taxable as salary.

Only the actual travel fare (air, rail or bus) for the journey within India on the shortest route. It does not cover hotel accommodation, meals, sightseeing, local conveyance at the destination, visa fees or travel insurance. LTA is a travel-fare exemption, not a holiday-cost reimbursement.

Air travel: economy-class fare of the national carrier on the shortest route. Rail (place connected by rail): AC First Class fare of the shortest route. Road where there is no rail link: first-class/deluxe public-transport fare, or the AC First Class rail-equivalent where no public transport exists. Private car/taxi is capped at the AC First Class rail fare for that route.

No. LTA covers domestic travel within India only. Foreign travel does not qualify for exemption under Section 10(5) under any circumstances, even if the journey starts and ends in India with a leg abroad.

No. The exemption applies only for journeys the employee actually undertakes, with or without family. If only your spouse and children travel while you stay back, that journey is not eligible for LTA exemption.

Family means the employee's spouse and children (exemption limited to a maximum of 2 children born on or after 1 October 1998; no restriction for children born earlier or for multiple births), plus parents, brothers and sisters wholly or mainly dependent on the employee.

Yes. If you used only 1 of the 2 journeys in a block, you can carry over 1 journey to the next block, but it must be availed in the first calendar year of that next block — i.e. during 2026 for the 2022-25 to 2026-29 transition. A carried-forward journey used in 2026 does not reduce the 2 journeys otherwise available for 2026-29.

You lose any journey you do not carry forward. Only 1 unused journey can be carried into the next block, and only if availed in that block's first calendar year. A second unused journey simply lapses at the end of the block.

Original travel tickets (air, rail or bus), boarding passes and a travel declaration, usually via Form 12BB submitted to your employer. The employer verifies the proof before allowing the exemption in Form 16. Keep the documents — the Income-tax Department can ask for them during scrutiny.

The exempt amount is the lower of the LTA actually received from your employer and the eligible fare on the shortest route. If your eligible fare is Rs 42,000 and you received Rs 60,000 LTA, only Rs 42,000 is exempt and Rs 18,000 is taxable. The exemption can never exceed the LTA paid or the fare spent.

No. LTA/LTC under Section 10(5) is a salary exemption available only to employees receiving LTA from an employer. Self-employed individuals and professionals cannot claim it, and neither can they claim HRA under Section 10(13A).

If you receive LTA but do not travel or cannot produce valid travel proof, the entire LTA is added to your taxable salary and taxed at your slab rate. LTA is exempt only against an actual, documented domestic journey within the block limits.