You claim LTA through your employer: take leave, travel within India, and hand in the tickets before the employer's proof deadline. Only the fares for you and your family count, for two journeys in the block that runs from 2026 to 2029, and only in the old tax regime; in the new regime, the default for FY 2026-27, the whole leave travel allowance is taxed as salary. On ₹85,000 of tickets and a ₹60,000 allowance, the exemption is ₹60,000.

Which LTA block year are we in?

The rules count journeys in blocks of four calendar years from 2022. The 2022-25 block closed on 31 December 2025; the current one runs from 1 January 2026 to 31 December 2029. Inside it, the LTA exemption covers two journeys.

If you made fewer than two journeys in 2022-25, one can be carried over, but only into the first year of the new block: your first LTA journey in 2026 is then exempt on top of the two for 2026-29. After 31 December 2026 the unused journey lapses.

The exemption is section 10(5) of the 1961 Act, now Schedule III of the Income-tax Act, 2025, with its conditions in rule 278. This page matters only if the old regime is cheaper for you.

What does Vivek's Kochi trip save?

Vivek earns a gross salary of ₹27,00,000 (not CTC) in Delhi, including ₹60,000 a year of leave travel allowance. In December 2026 he flies from Delhi to Kochi and back with his wife and son, on direct economy tickets, the class his employer allows, costing ₹85,000 for the three. He made no LTA trip in 2022-25, so this is his carried-over journey and both 2026-29 journeys stay unused.

From April 2026 the air ceiling is the fare for the class your employer entitles you to, by the shortest route, not the national carrier's economy fare, so all ₹85,000 of his direct tickets is eligible fare. His LTA exemption is the lower of the allowance and that fare: ₹60,000. The other ₹25,000 is his own cost.

The HRA exemption on his Delhi rent, the interest on his Kochi flat's loan, and his 80C and 80D claims (the 1961 Act numbers) already come to ₹8,40,000, past the ₹8 lakh of deductions at which the old regime costs less at his salary, as the section 80C guide works out.

After the ₹50,000 standard deduction and those claims, his taxable income is ₹18,10,000, and the LTA claim brings it to ₹17,50,000. That ₹60,000 would have been taxed at 30% plus 4% cess, so his FY 2026-27 tax falls from ₹3,69,720 to ₹3,51,000: a saving of ₹18,720. The new regime would charge ₹3,82,200.

What if the tickets cost less, or your slab differs?

Then only the fare is exempt; the rest is taxed as salary. Had Vivek's tickets cost ₹45,000, the exemption would be ₹45,000 and the remaining ₹15,000 would cost him ₹4,680. In a year with no trip, all ₹60,000 is taxed.

The saving follows your old-regime slab, set by taxable income after deductions, not gross salary. In FY 2026-27, with taxable income between ₹10 lakh and ₹50 lakh, every ₹10,000 of exempt LTA saves ₹3,120. Between ₹5 lakh and ₹10 lakh it saves ₹2,080, and from ₹50 lakh to ₹1 crore, with the 10% surcharge, about ₹3,430.

What travel counts for LTA, and what does not?

By air, the ceiling is the fare for your entitled class, by the shortest route. The trip must be within India, and only the fare counts, not hotels, food or local taxis. You must be on leave, and the Act ties the exemption to your own journey on leave, so check your employer's LTA policy before claiming tickets for family who travel without you.

The other ceilings also use the shortest route. By train, or by road or your own car between places joined by rail, it is the air-conditioned first-class rail fare. Where there is no rail link, it is the first-class or deluxe fare of recognised public transport, or ₹30 a kilometre where none runs and the State sets no rate. A route through a third city is capped at the direct fare.

Family means your spouse and children, plus parents, brothers and sisters who depend wholly or mainly on you. Only two surviving children count, except for children born before 1 October 1998 and twins or triplets born after a first child.

How do you claim LTA from your employer?

Keep the leave approval, the tickets, boarding passes and the card or bank record of payment: that is your LTA proof. Declare the journey in Form 124, which replaced Form 12BB from 1 April 2026, and tell payroll whether it is your carried-over 2022-25 journey or the first or second of 2026-29.

Vivek's December 2026 tickets go in with his other FY 2026-27 proofs, which most employers collect between December and February; check your payroll's cut-off. Afterwards, check that Form 16 (Form No. 130 under the new rules) shows the exemption. Anything not proved is taxed through extra TDS in the last months, the same squeeze that hits late 80C proofs.

Dhi answers questions like whether an LTA claim and your other deductions justify the old regime, using your own salary figures. Dhi looks at cash flow, net worth, protection and goals together, and never mis-sells.

Frequently asked questions

No. The rule covers travel to a place in India only, so LTA paid for a foreign holiday stays taxable salary. Within India any destination counts, your home town included.
Yes, when both are salaried and each salary includes LTA: each claims from their own employer, and each journey counts in that person's own block. A ticket can be claimed only once: on a trip taken together, either one of them claims the family's fares and the other keeps their journeys for another trip, or each claims only their own tickets, if both employers accept a split.
Yes, in an old-regime return filed by the due date, 31 July 2027 for FY 2026-27, if your salary paid the amount as LTA and you kept the tickets; nothing in the Income-tax Act, 2025 limits the exemption to claims made through the employer. Form 16 will show the allowance as taxed, so expect the department to ask for proof. A late return is taxed under the new regime, where LTA is not exempt.

This is general information for salaried individuals in India, not personalised financial advice.