Twice in 4-year block (2026-29). Domestic only. Air economy/1st AC train/AC bus. Spouse + 2 kids + parents covered. OLD REGIME ONLY. Plan ₹1-4L exemption.
LTA = Leave Travel Allowance / Concession (Section 10(5)). EMPLOYEE TRAVEL EXPENSE reimbursement TAX-EXEMPT. KEY RULES: (1) Twice in 4-year block (2022-25, 2026-29). (2) DOMESTIC INDIA travel ONLY (no international). (3) SHORTEST ROUTE between origin + destination. (4) RAIL (1st AC/AC tier), AIR (economy), BUS (AC). (5) NOT food/hotel/cab/local transport. (6) FAMILY: spouse, children (up to 2), dependent parents + siblings. (7) OLD REGIME ONLY — new regime doesn't allow LTA exemption.
LTA BLOCK PERIODS: (1) Block 1: 2014-17. (2) Block 2: 2018-21. (3) Block 3: 2022-25. (4) Block 4: 2026-29 (current). MAX TWO JOURNEYS per block per employee. CARRY FORWARD: ONE journey can carry forward to first year of next block (if not used in current block). EXAMPLE: 2022-25 block, only 1 journey used. Can take 1 more journey in 2026 (carried forward) + 2 in 2026-29 block = 3 journeys in 2026. STRATEGIC: plan family vacation to maximize LTA usage.
LTA COVERS: (1) AIR: economy class (lowest fare even if higher booked). (2) RAIL: AC First Class (highest train class). (3) BUS: AC Deluxe class (if no rail available). (4) ROAD between non-rail destinations. NOT COVERED: (1) HOTEL accommodation. (2) FOOD. (3) LOCAL TRANSPORT at destination. (4) INTERNATIONAL TRAVEL. (5) Recreational expenses. (6) Other non-travel expenses. STRICT: only TRANSPORT cost to + from destination via shortest route, lowest applicable class.
LTA CLAIM PROCESS: (1) EMPLOYEE plans + books travel. (2) RETAIN tickets, boarding passes, receipts. (3) Submit to employer's HR/payroll within FY. (4) Employer verifies + grants exemption in salary. (5) FORM 12BB declaration. (6) Form 16 reflects LTA exemption. DOCUMENTATION REQUIRED: (1) Travel tickets (original/digital). (2) Boarding passes for flights. (3) Bank statements showing fare deductions. (4) Hotel/local expense receipts NOT needed (not eligible). (5) Family travel — same booking ideal.
LTA TAX STRATEGY: (1) OLD REGIME ONLY — choose regime considering LTA + HRA + 80C. (2) PLAN family vacation around LTA. (3) USE both block entitlements (2 journeys per 4 years). (4) BOOK economy/AC tier for max exemption. (5) JOINT FAMILY travel: spouse + 2 children + parents = 5 LTA reimbursements. (6) WORK ASSIGNMENT travel: separate (not LTA). (7) DEFERRED LTA: 2 in current block + 1 in next block first year. (8) AMOUNT: typically ₹50K-2L per journey. Maximizes ₹1-4L tax exemption over 4 years. SIGNIFICANT TAX SAVINGS for senior management with high LTA component.