Definition
Leave Travel Allowance (LTA)
LTA is a salary component that lets you claim tax exemption on travel expenses incurred on a holiday within India.
Leave Travel Allowance exempts the cost of domestic travel (air, rail or bus fare for the shortest route) for you and your family when you take leave. It does not cover hotel stay, food, or international travel — only the journey fare.
The exemption can be claimed for a limited number of journeys within a defined block of years, and unused claims can sometimes be carried forward to the first year of the next block. You must keep tickets and boarding passes as proof.
LTA is exempt under the old regime only. The exemption is part of your CTC, so even if you do not travel, the LTA amount is paid out but becomes fully taxable.
Related terms
- Standard DeductionThe standard deduction is a flat amount subtracted from salary or pension income without needing any proof of expenses.
- Form 16Form 16 is the certificate your employer gives you summarising your salary and the tax deducted at source during the year.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.