Leave Travel Allowance, or LTA, is a salary component that reimburses the cost of travelling within India while you are on leave. Its value is the tax break: the travel fare can be exempt from tax under the LTA exemption, but only in the old regime and only against actual journeys.

How it appears in salary

LTA is usually a modest annual figure, often one month’s basic or a fixed amount, paid either monthly into gross or held back and released on a travel claim. If you never claim it against travel, it is simply paid out and taxed like any other allowance.

What the exemption covers

Only the transport fare, for you and your family, for domestic travel, twice in a government-notified block of four calendar years. Air is capped at economy fare by the shortest route, rail at first-class AC. Hotels, meals, local sightseeing and any foreign leg are never covered. You declare the claim on Form 12BB with fare evidence.

Frequently asked questions

Is LTA paid every year?

The allowance may be part of your annual package every year, but the tax exemption is limited to two journeys per four-year block.

What happens to unclaimed LTA?

It is paid out with salary and fully taxed. Some employers let you carry an unclaimed amount forward within the block; others do not.

Does LTA have any value under the new regime?

No exemption. Under the new regime LTA is just taxable cash, so the component loses its main purpose.

Track your block and claim with the LTA Exemption Calculator, and see LTA within the wider structure using the Salary Breakup Calculator.