Last Updated on April 7, 2026 by teamtfl
In 2019, my client Preeti (name changed) — a 42-year-old senior manager at a multinational — came to me with a simple question: “Hemant, my company gives me Rs 80,000 LTA every year. Can I claim it tax-free every year?” I told her no — only twice in a four-year block. She looked stunned. She had been receiving LTA for seven years without claiming the exemption. Seven years of paying tax on an allowance that was designed to be tax-free.
Preeti’s story is painfully common. LTA (Leave Travel Allowance) is one of the most underutilised tax-saving components in Indian salaries. Not because it’s complicated — but because HR doesn’t explain it, and most employees don’t ask.
And here’s what’s new in 2026: the entire LTA exemption is gone if you’re on the New Tax Regime. That’s right. The regime that became default from FY 2023-24 removes the LTA exemption entirely. So the first question isn’t “how do I claim LTA?” — it’s “am I even eligible to claim it anymore?”
⚡ Quick Answer
LTA (Leave Travel Allowance) is a salary component that can be claimed tax-free under the Old Tax Regime — twice in a block of four calendar years. The current block is 2022-2025. LTA exemption is NOT available under the New Tax Regime (the default from FY 2023-24). You can claim LTA for domestic travel only, by shortest route, with actual bills. Accommodation and food are not covered. If both spouses are salaried, only one can claim per journey.
What is LTA?
Leave Travel Allowance is a component of your gross salary that employers provide to cover the cost of your travel when you take leave. If you actually use it for travel and submit bills, that portion of your salary becomes tax-free under Section 10(5) of the Income Tax Act. If you don’t claim it, the amount gets added to your taxable income.
Think of LTA as a “use it or lose it” benefit. You earn it every year as part of your CTC. Whether it stays tax-free or gets taxed depends on whether you travel and claim it correctly.
The Big 2026 Change — Old Regime vs New Regime
| Tax Regime | LTA Exemption Available? |
|---|---|
| Old Tax Regime | Yes — twice per block of 4 calendar years under Section 10(5) |
| New Tax Regime (default from FY 2023-24) | No — LTA is fully taxable |
🚫 Critical for Senior Executives
If your employer has moved you to the New Tax Regime (now the default), you’ve already lost the LTA exemption. Along with HRA, Section 80C, 80D, standard deduction (still available), home loan interest on let-out property, and most other exemptions. For high-income earners with home loans, health insurance, and tax-saving investments — the Old Regime often still wins. Run the math before accepting the default.
The Current Block — 2022 to 2025
LTA is claimed in “blocks” of four calendar years. The block years are fixed by the government — not by your calendar or your employer’s financial year. Here’s the history and current status:
| Block | Calendar Years | Status |
|---|---|---|
| Previous Block | 2018-2021 | Closed (COVID-affected) |
| Current Block | 2022-2025 | Ended Dec 2025. Carry-forward claim possible in 2026. |
| Next Block | 2026-2029 | Active now |
Carry-forward rule: If you couldn’t claim both LTA exemptions in the 2022-2025 block, you can carry forward ONE claim to the first year of the next block (2026). But only one. Not both. And only if you avail it in 2026, not later.
LTA Rules — What You Can and Cannot Claim
What Qualifies
Domestic travel only. You can travel anywhere in India — Goa, Kerala, Sikkim, Ladakh, Andamans. The shortest route from your residence to the destination is what’s reimbursable. If you took a longer scenic route, only the shortest route portion is covered.
Family includes: Spouse, up to two children (born after October 1998), dependent parents, and dependent siblings. If you have three children and two were born before October 1998, all three qualify. If all three were born after, only two.
Modes of travel: Air (economy class only on the national carrier’s fare), train (AC first class on fastest route), or road (AC bus where available, or first-class taxi/hired vehicle fare). Private cars — only fuel and toll expenses are generally not allowed; most employers accept deluxe bus or hired car receipts.
What Does NOT Qualify
🚫 Common Exclusions
International travel (even if the ticket passes through India), hotel accommodation, food and beverages, local sightseeing, taxi fares at destination, visa fees, travel insurance, and shopping. Only the point-to-point journey cost is claimable. If your family travels without you, you cannot claim. You yourself must be on the trip.
How to Claim LTA — The Process
STEP 1 Take actual leave and travel
You must have an official leave record with your employer for the travel dates. Work-from-holiday-destination does not qualify.
STEP 2 Collect original documents
Air tickets + boarding passes, train tickets, or bus tickets. Keep both soft copies and hard copies. Your employer may forward these to the IT department for scrutiny.
STEP 3 Submit to HR/Payroll with declaration
Most companies have a specific LTA claim form. Attach bills and submit before the financial year closes (typically by January-February). Your LTA component will be treated as exempt in that year’s Form 16.
STEP 4 Retain copies for 6 years
The Income Tax Department can call for verification up to 6 years after the claim. Keep originals or clear copies safe.
The Dual-Income Household Trap
If both spouses are salaried and both get LTA, you can both claim — but not for the same journey. Here’s how smart dual-income couples structure it:
Wrong way: Both spouses try to claim LTA for the same family trip. Both claims get rejected because only one can claim per journey.
Right way: Husband claims LTA in year 1 for the Goa trip. Wife claims LTA in year 3 for the Kerala trip. Both trips are claimed using the “twice per block” rule, just distributed between the two earners. Effectively, the family gets four tax-free trips in a block instead of two.
This is the kind of thing a good tax planning strategy should handle automatically. Most employees don’t think of it.
Not sure if the Old or New Tax Regime is better for your salary?
The choice depends on your deductions, salary structure, and investments. A wrong choice can cost you Rs 50,000-2 lakh per year in taxes.
Mistakes That Invalidate Your LTA Claim
1. International itineraries. A Singapore trip with a Delhi layover does not qualify. Only strictly within-India travel counts.
2. Submitting photocopies without originals. If the IT department asks to verify, you’ll need originals. Scanned PDFs are usually acceptable for initial submission.
3. Travel without leave record. Weekend trips with no official leave are usually rejected — the rule requires that you’ve actually taken leave.
4. Claiming for family-only travel. If you’re at work in Mumbai while your family is in Goa, that trip does not qualify for your LTA claim.
5. Multiple claims in one year. Even if you’ve taken two trips in one calendar year, you can only claim LTA for one trip per year. The “twice per block” limit is across four years, not two trips per year.
LTA vs HRA vs Other Allowances — Don’t Confuse Them
One pattern I see repeatedly: employees conflate LTA with HRA (House Rent Allowance) or standard deduction. They’re entirely separate components of your salary with separate rules.
| Component | Old Regime | New Regime |
|---|---|---|
| LTA | Exempt (twice in 4 years) | Fully taxable |
| HRA | Exempt (formula-based) | Fully taxable |
| Standard Deduction | Rs 50,000 | Rs 75,000 (enhanced in Budget 2024) |
| Section 80C (PPF, ELSS, etc.) | Up to Rs 1.5 lakh | Not available |
If you’re on the Old Regime and you have significant 80C investments + HRA claim + LTA + home loan interest, stick with it. If you have few deductions and prefer simplicity, the New Regime might save you tax. Do the math — don’t guess.
LTA is not complicated — but it is one of the most overlooked tax benefits in Indian salaries. Plan your travel. Keep the receipts. Claim it correctly. Or choose the regime that actually serves your salary structure.
Travel smart. Claim smarter.
💬 Your Turn
Are you on the Old or New Tax Regime in 2026? Have you claimed LTA this block — or did you miss out? Share your experience in the comments. Your story might help another reader.
Thanks Vidya and Hemant for the details.
Please answer below queries:
1) If an employee not declared LTA but availed Leave and travelled, can he still submit proofs / claim for LTA during Investment proof submission period (end of the year)?
2) Can employee use the full amount reserved (eg. 60K) during 1st trip itself instead of waiting for second trip and claim bills of 1st trip itself?
3) If employee is declared LTA but not availed / claimed this component, when does he gets this amount back? Is it every financial year or after the current block i.e. 2014-2017?
Hi sir, Is there any limit on minimum/maximum no of days to be on leave? Also can we include casual leaves or we should use only Paid Leaves. Pl. clarify.
Thanks, KKBabu
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