LTA Exemption Rules for FY 2024-25: Eligibility & Limits
- Rajesh Kumar Kar
- Nov 10
- 11 min read
Leave Travel Allowance (LTA) exemption for FY 2024-25 is available only to salaried employees opting for the old tax regime under Section 10(5) of the Income Tax Act, 1961. The exemption applies solely to travel within India and covers expenses incurred by the employee and eligible family members. It excludes accommodation, food, and other local costs. LTA can be claimed for up to two journeys in a four-year block, with the current block being 2022–2025. The claim amount is limited to the lower of actual travel expenses or the LTA provided by the employer, ensuring fair and transparent tax benefits.
Table of Contents
Understanding Leave Travel Allowance (LTA)
Leave Travel Allowance, commonly known as LTA, is a benefit provided by employers to their employees as part of their salary package. It allows salaried individuals to claim tax exemption for expenses incurred on travel while on leave within India. The exemption is granted under Section 10(5) of the Income Tax Act, 1961, and aims to encourage domestic tourism among employees. LTA covers travel undertaken by the employee alone or along with eligible family members, such as a spouse, dependent children, parents, or siblings. However, the exemption applies only to the travel fare component and not to related expenses such as accommodation, meals, or sightseeing.
Eligibility Criteria for LTA Exemption in FY 2024-25
To claim LTA exemption for FY 2024-25, an employee must receive LTA as part of their salary structure. The benefit is available only to salaried individuals who have opted for the old tax regime. The journey must be taken within India, and proof of travel is mandatory. The family members whose travel expenses can be included are the employee’s spouse, dependent children, parents, and siblings. However, there is a limit on the number of children — exemption is available for up to two children born after 1 October 1998. For children born before this date, the restriction does not apply. The exemption can be claimed for a maximum of two journeys in a four-year block, and the current block period is 2022–2025.
What Expenses Are Covered Under LTA?
LTA covers only the cost of travel incurred for journeys taken within India. The exemption includes expenses related to air, rail, or bus fares, depending on the mode of travel. If the travel is by air, the exemption is limited to the economy class fare of the national carrier by the shortest route to the destination. For rail travel, the exemption is limited to the first-class AC fare by the shortest route. In cases where neither rail nor air service is available, the exemption is limited to the fare equivalent to a recognized public transport service for the shortest route. Expenses related to lodging, food, taxi, and sightseeing are not eligible for LTA exemption, as the benefit focuses purely on travel costs.
Is LTA Exemption Allowed in the New Tax Regime?
LTA exemption is not available under the new tax regime introduced under Section 115BAC. The new regime offers lower tax rates but removes most exemptions and deductions, including LTA. Therefore, employees who wish to claim LTA benefits must opt for the old tax regime while filing their income tax return for FY 2024-25. This distinction is important for salaried individuals planning their tax-saving strategy, as choosing the correct regime determines the availability of exemptions.
How LTA Works in the Old Tax Regime
Under the old tax regime, the LTA exemption operates based on the employee’s actual travel expenses and the allowance received from the employer. The exemption amount is restricted to the lower of the actual travel expenses incurred or the amount of LTA provided by the employer. Employees can claim this exemption twice in a block of four years, as defined by the Income Tax Department. The current block period is 2022–2025. If an employee fails to claim the exemption for one journey in this block, it can be carried forward to the first year of the next block, i.e., 2026. This system provides flexibility and ensures that employees can utilize the benefit even if travel plans are postponed.
LTA Exemption Limits and Calculation Rules
The exemption limit depends on the mode of travel used for the journey:
For air travel, the exemption is restricted to the economy class fare of the national carrier by the shortest route
For rail travel, the exemption is allowed up to the first AC fare by the shortest route.
For road travel where rail or air services are not available, the exemption is based on the fare of a recognized public transport service on the shortest route.
If no recognized transport service exists, the exemption is calculated as equivalent to the first-class AC rail fare for the distance traveled.
For example, if an employee receives an LTA of ₹40,000 and incurs actual travel expenses of ₹35,000, the exemption allowed will be ₹35,000. If the expenses are ₹50,000, the exemption will be limited to ₹40,000.
How to Claim LTA Exemption for FY 2024-25
To claim LTA exemption, employees must undertake eligible travel during FY 2024-25 and retain valid travel documents as proof. The process begins with ensuring that the journey is completed within India and includes only the employee and eligible family members. Employees should collect all tickets, boarding passes, and invoices related to the travel. Once the travel is completed, these proofs must be submitted to the employer within the prescribed deadline, usually before the end of the financial year. Employers verify the documents before granting the exemption while computing taxable salary. If the employee misses submitting proofs to the employer, the claim can still be made while filing the income tax return, provided valid documentation is maintained.
LTA Claim Documentation and Form 12BB Submission
Employees must submit Form 12BB to their employer while claiming LTA exemption. This form provides details of the journey, along with travel proofs such as tickets, boarding passes, and receipts from recognized transport operators. The employer uses this information to compute the taxable portion of LTA. All documents should clearly mention the travel route, date, and passenger details. Incomplete or missing documentation can lead to disallowance of the claim. For those filing independently, it is important to retain these records for future verification by tax authorities, as the Income Tax Department may request supporting documents during scrutiny.
LTA Block Period Rules: 2022–2025 Explained
The concept of block periods determines how often an employee can claim LTA exemption. Each block comprises four years, and employees can claim exemption for a maximum of two journeys during that time. The ongoing block period is from 2022 to 2025. If an employee does not claim one journey within this period, the unclaimed journey can be carried forward to the first year of the next block, i.e., 2026. However, such carry-forward is allowed only once and must be utilized in that year. This system ensures fair distribution of the benefit and provides employees with an opportunity to plan their travel flexibly without losing eligibility.
Important Deadlines for Claiming LTA in FY 2024-25
For FY 2024-25, the deadline for utilizing the LTA component is March 31, 2025. Employees must ensure that eligible travel is completed and supporting proofs are submitted to their employer before this date. Claims made after the deadline may not be accepted by the employer and will need to be claimed directly while filing the income tax return. Timely submission of documents helps avoid discrepancies and ensures smooth processing of exemptions. Employees are also advised to verify their salary slips and Form 16 to confirm that the LTA exemption has been properly reflected.
Common Mistakes While Claiming LTA
Many employees lose out on LTA benefits due to avoidable mistakes. Some of the common errors include claiming international travel, submitting incomplete proofs, failing to retain travel tickets, or attempting to include hotel and food expenses. Others miss the exemption by not utilizing the allowance within the block period or by failing to opt for the old tax regime. To avoid these issues, employees should understand the rules clearly and maintain complete documentation. Platforms like TaxBuddy help taxpayers identify such lapses and guide them on correctly claiming exemptions during tax filing.
How TaxBuddy Simplifies LTA and Tax Filing
TaxBuddy offers an AI-driven tax filing experience that simplifies the process of claiming exemptions like LTA. It helps users identify eligible deductions, verify supporting proofs, and ensure compliance with the Income Tax Act. TaxBuddy’s system auto-validates Form 12BB entries and integrates seamlessly with the employee’s Form 16, ensuring accurate computation of taxable income. The platform also provides expert-assisted options for complex cases, such as when claims are carried forward or missed with the employer. For anyone looking for assistance in tax filing, it is recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
Conclusion
LTA remains a valuable component of a salaried employee’s tax-saving plan under the old tax regime. Understanding its eligibility rules, limits, and deadlines helps in maximizing the exemption and ensuring compliance. By maintaining proper records and selecting the correct regime, employees can effectively reduce their tax burden. With expert support from the TaxBuddy mobile app, claiming exemptions and filing taxes becomes seamless and reliable.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers flexibility to suit different types of taxpayers. Those who are comfortable filing their own tax returns can opt for the self-filing plan, where the AI-driven system auto-fills data using uploaded documents like Form 16 and TDS certificates. It also performs real-time error checks and tax calculations to ensure accuracy. For individuals who prefer professional help, the expert-assisted plan provides end-to-end guidance — from document collection to return submission and post-filing support. This ensures that even complex cases involving exemptions, business income, or notices are handled by trained professionals, giving users confidence and peace of mind.
Q2. Which is the best site to file ITR?
The official Income Tax Department e-filing portal is the statutory platform for filing income tax returns in India. However, many taxpayers prefer using private, trusted platforms such as TaxBuddy because of their ease of use, faster processing, and built-in accuracy tools. TaxBuddy’s platform combines automation with expert validation, helping users claim eligible exemptions like LTA, HRA, and deductions under various sections without manual errors. It also provides continuous updates based on the latest tax laws, ensuring returns are compliant and optimized for refunds.
Q3. Where to file an income tax return?
An income tax return can be filed online through two main options — the official e-filing portal of the Income Tax Department or reliable private tax platforms like TaxBuddy. The government portal is ideal for experienced filers, while platforms like TaxBuddy simplify the process through AI automation and expert guidance. TaxBuddy enables taxpayers to upload their Form 16 or income details, after which the system automatically computes tax liability, applies relevant deductions, and generates the return in minutes. This hybrid model of automation and human expertise makes online filing quicker, easier, and more accurate.
Q4. Can LTA be claimed for international travel in FY 2024-25?
No, LTA exemption is strictly limited to travel undertaken within India. Section 10(5) of the Income Tax Act clearly states that Leave Travel Allowance applies only to domestic journeys. Any expenses incurred for international travel, whether partially or wholly outside India, are not eligible for exemption. Even if the journey starts in India but extends abroad, only the domestic portion may qualify for partial consideration. Taxpayers should ensure that travel routes, destinations, and tickets clearly indicate that the journey was within India to avoid disallowance during verification.
Q5. Can I claim LTA exemption if I have more than two children?
LTA exemption is subject to a two-child limit for children born after 1 October 1998. If an employee has more than two children born after this date, the exemption can only be claimed for two of them. However, there is no restriction for children born before this date — the exemption can cover them without limitation. This rule was introduced to align with family planning policies and ensure uniform tax benefits. When claiming the exemption, employees must declare dependent family details and ensure compliance with this condition to avoid disallowance by the employer or tax authorities.
Q6. How is the maximum exemption calculated for LTA in FY 2024-25?
The maximum exemption for LTA is calculated based on three parameters — the mode of travel, the shortest route, and the actual fare paid.
For air travel, the exemption is capped at the economy class fare of the national carrier (Air India) for the shortest route.
For rail travel, the exemption is limited to the first AC fare by the shortest route.
For road travel (where rail or air services do not operate), the exemption equals the fare of a recognized public transport service.
The exemption is the lower of the actual travel fare or the amount of LTA provided by the employer. For example, if an employee is eligible for ₹40,000 as LTA but spends ₹35,000 on travel, only ₹35,000 is exempt. Conversely, if the expenses exceed the LTA amount, the exemption is capped at ₹40,000.
Q7. Can I claim LTA if I missed submitting proofs to my employer?
Yes, employees who forget to submit travel proofs to their employer can still claim LTA exemption directly while filing their income tax return. However, they must keep all relevant documents such as tickets, boarding passes, and invoices ready in case of scrutiny by the Income Tax Department. The claim must be based on actual travel undertaken during the eligible period, and the journey should be verifiable. Using platforms like TaxBuddy helps ensure that such claims are validated correctly and supported by proper documentation before submission to avoid future discrepancies.
Q8. Is LTA available under the new tax regime?
No, LTA exemption is not available under the new tax regime introduced under Section 115BAC. The new regime provides lower tax rates but eliminates most exemptions and deductions, including Leave Travel Allowance. Employees aiming to claim LTA exemption must opt for the old tax regime while filing their returns for FY 2024-25. The choice between the two regimes should be made after comparing total tax liability. Platforms like TaxBuddy provide automatic regime comparison to help taxpayers select the one that maximizes their savings and compliance benefits.
Q9. What documents are required for claiming LTA exemption
To claim LTA exemption, employees must maintain the following documents:
Travel tickets or e-tickets for air, rail, or bus journeys.
Boarding passes or invoices confirming completion of travel.
Receipts from recognized transport providers showing fare details.
Proof of travel dates, destinations, and passenger names.
Form 12BB, declaring details of travel expenses to the employer.
These documents serve as evidence of travel and must be submitted to the employer before the financial year ends. For self-filers, retaining these proofs is mandatory in case the Income Tax Department requests verification later.
Q10. What happens if I don’t use my LTA before March 31, 2025?
If an employee does not utilize their LTA allowance before March 31, 2025, the unclaimed exemption for one journey can be carried forward to the first year of the next block period (i.e., 2026). However, this carry-forward is allowed only once, and the journey must be completed within that year. Failing to use the carried-forward benefit within the given period results in the lapse of exemption eligibility. Employees should plan their travel and submit proofs within deadlines to avoid losing the benefit. Employers generally communicate these timelines to help employees stay compliant.
Q11. Can I claim LTA for a road trip if trains operate on the same route?
Yes, it is possible to claim LTA for a road journey even if trains operate on the same route. However, the exemption will be restricted to the equivalent first AC rail fare for the distance between the origin and destination. This ensures consistency in how travel cost exemptions are determined, regardless of the chosen mode of transport. If the route does not have a recognized rail or air service, the exemption will be based on the fare of a recognized public transport operator. Proper documentation like toll receipts, tickets, or invoices should be retained as proof of travel.
Q12. Does TaxBuddy assist in verifying and claiming LTA exemptions during ITR filing?
Yes, TaxBuddy provides comprehensive support for verifying and claiming LTA exemptions during ITR filing. The platform’s AI-driven system automatically identifies exemptions available under the old regime, checks compliance with the two-journey rule, and validates Form 12BB details. For employees who missed submitting proofs to their employer, TaxBuddy’s expert-assisted filing ensures that LTA claims are accurately reflected in their income tax return and backed by proper documentation. Its post-filing assistance also helps users respond confidently to any verification requests from the Income Tax Department.
