Leave Travel Allowance (LTA): Eligibility, exemption limits, rules & claim process

31 July 2025

In the hustle era and age of hybrid work, vacations are not just a privilege they're a necessity. But what if your holiday expenses also took a breather? That's where Leave Travel Allowance LTA steps in a secret advantage in your salary structure that allows you to set off on your travels without loading up on expenses. Whether you're off to the hills or the beaches, LTA can lighten your wallet for your vacation, assuming you know how to use it properly.

This blog is your go-to guide for navigating leave travel allowance LTA like a pro. We’ll dive into who’s eligible, what’s exempt, and how to claim it with zero stress. Plus, you’ll learn how to make the most of LTA reimbursement while staying within the rules. Let’s unpack it!

Key takeaways

LTA is a component of your salary that pays your travel expenses in India on official leave.
You can avail yourself of an LTA exemption for two journeys within a 4-year cycle, up to a certain transport fare.
Travel costs alone excluding food, accommodation, and sightseeing are payable under LTA reimbursement.
Correct documentation and timing are the essentials for availing tax-free LTA benefits.
Online platforms such as Pluxee facilitate the smooth submission and monitoring of employees' LTA claims.

What is Leave Travel Allowance (LTA)?

Leave Travel Allowance (LTA) is a component of your salary that covers the cost of travel when you’re on leave. But it’s not just free money it’s a benefit designed to reimburse travel expenses incurred while vacationing with your family. The icing on the cake? The Income Tax Act allows for a leave travel allowance exemption under Section 10(5), making it partially tax-free if claimed correctly.

LTA is generally a part of your Cost to Company (CTC) and is paid on actual travel during paid leave. This exemption can reduce your annual tax outgo, particularly if you time your travel strategically.

Did you know?

Over 54% of employers are still not aware they can increase their employees’ take home salary by including Leave Travel Allowance in their benefits programme.

Who Can Claim LTA?

The question to ask first is am I eligible to claim LTA? The answer is in your terms of employment. You should:

Be an employee on the salary roll with LTA as a part of your salary package.
Take official leave from your job and plan a trip within India.
Provide valid travel proof and journey information.

Recall that leave travel reimbursement is offered only if your company has specified LTA as a component of your salary. If it's not on your pay slip, you can't claim it not even if you travel to Ladakh twice annually! Some organisations may ask you to report your LTA availability at the beginning of the financial year, so please review your HR policies.

You can read more about it on Smart Income Tax Saving Tips for Salaried Individuals | Pluxee (Sodexo)

Did you know?

LTA exemptions are available only under the old tax regime. If you've opted for the new tax regime under Section 115BAC, you won’t be able to claim LTA tax benefits for FY 2024–25.

What expenses are eligible under LTA reimbursement?

Here's where it becomes a bit specific. LTA reimbursement pays only for the fare of travelling, not food, stay, or other sightseeing costs.

Permitted expenses:

Economy airfare (if you go by air)
AC first-class train fare (if by train)
Public transport fares, such as buses or cabs, if no train/air facility is available

So if you're fantasising about a seaside resort of luxury, by all means, indulge. Just don't count on the LTA paying for that specific bill! It's best to maintain a separate budget for accommodation and food to prevent confusion at the time of reimbursement.

Leave travel allowance exemption limits: How much tax can you save?

When we discuss leave travel allowance exemption, the actual tax-free amount you can claim is based on:

1. Mode of travel

The tax exemption is further restricted to the economy class fare of the national carrier (Air India), the shortest route to the destination when travelling by air. When travel is performed by rail, however, the exemption is restricted to the fare of the AC first class or the highest class by train, by the shortest route.

2. Destination & itinerary

Only travel within India counts. Overseas holidays, including to inexpensive tourist destinations such as Nepal or Bhutan, don't count towards leave travel reimbursement.

3. Number of individuals

You can avail of LTA for yourself, your spouse, and two children. Your parents and siblings are also eligible if they are completely dependent on you.

The positive aspect? Two trips in one block of four calendar years qualify for a leave travel allowance exemption. The ongoing block is from 2022 to 2025. Did you overlook a claim within the last block? No concerns—you can forward one trip and claim it within the first year of the current block. All you need to do is preserve the original journey proofs to accompany your delayed claim.

What is the LTA claim process?

Claiming LTA may sound like a paperwork hurricane, but it's surprisingly easy. Here's your cheat sheet:

Take leave and travel: You need to be officially on leave. Staycation getaways or business trips don't qualify.
Save all proofs of travel: This includes travel tickets, boarding passes, railway tickets, or bus receipts. If you travel by car, you'll need fuel bills and toll receipts.
Send documents to HR/Payroll: Your employer can have an online platform or a traditional paper-based submission. Be sure to use their procedure and timeframe.
LTA Reimbursement is credited: After the documents are checked, the eligible sum will be refunded to you, tax-free if it is below the leave travel allowance exemption ceiling.

Some employers may do random audits, so ensure your submissions are truthful and traceable. False claims can get you into trouble.

Smart tips to maximise your LTA reimbursement

A bit of planning can take you far. Here's how to get the best out of your LTA:

Travel off-peak season to save money and maximise your exemption amount.
Book early—lower fares mean you get more from your allowance.
Fly direct routes—only the shortest distance counts.
Stack LTA claims with holidays to get maximum value.
Be aware of the block years and plan your trips accordingly.

Also, travel to destinations that provide a good mix of travel expenses and enjoyment. A well-planned LTA holiday can be both a stress-free break and a financially savvy decision.

Final thoughts

Leave Travel Allowance (LTA) is not only a tax-saving benefit—it's your opportunity to travel smarter, not pricier. With proper planning, timing, and documentation, you can have your holiday while cutting down your taxable income. Whether it's a short trip to the hills or a long train journey across states, LTA is your golden pass to converting leaves into lifetime memories, without the money pangs.

And when it comes to making the most of your LTA and other employee benefits, the Pluxee Card is your perfect companion. This innovative, reloadable 2-in-1 prepaid card comes with a 3-year validity and simplifies your benefit management like never before. One card is dedicated to your meal benefits, while the other covers a wide range of eligible expenses, like fuel, telecom, rewards, office wear, books, wellness, gadgets, and of course, your LTA claims.