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Leave Travel Concession or Assistance (LTC/LTA) [Section 10(5)]

The employee is entitled to exemption under section 10(5) in respect of the value of travel concession or assistance received by or due to him from his employer or former employer for himself and his family, in connection with his proceeding—

  1. on leave to any place in India.

  2. to any place in India after retirement from service or after the termination of his service.

The exemption shall be allowed subject to the following:

  1. where journey is performed by air — Maximum exemption shall be an amount not exceeding the air economy fare of the National Carrier by the shortest route to the place of destination;

  2. where places of origin of journey and destination are connected by rail and the journey is performed by any mode of transport other than by air — Maximum exemption shall be an amount not exceeding the air-conditioned first class rail fare by the shortest route to the place of destination; and

  3. where the places of origin of journey and destination or part thereof are not connected by rail and the journey is performed between such places — The amount eligible for exemption shall be:

    1. where a recognised public transport system exists, an amount not exceeding the 1st class or deluxe class fare, as the case may be, on such transport by the shortest route to the place of destination; and

    2. where no recognised public transport system exists, an amount equivalent to the airconditioned first class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail.

Exemption will, however, in no case exceed, actual expenditure incurred on the performance of journey.


  • The assessee can claim exemption in respect of any two journeys in a block of 4 years. For this purpose, the first block of 4 years was calendar years 1986-89, second block was 1990-93, third block was 1994-97, fourth block was 1998-2001, fifth block was 2002-05 sixth block was 2006-09, seventh block is 2010 to 2013, eight block is 2014-2017 and ninth block will be 2018-2021.

  • If the assessee has not availed of the exemption of LTC in a particular block, whether for both the journeys or for one journey, he can claim the exemption of first journey in the calendar year immediately succeeding the end of the block of four calendar years. In other words, maximum one journey can be carried forward and that too only for the first journey in the following calendar year unless the period is otherwise extended. Such journey undertaken during the extended period will not be taken into account for determining the tax exemption of two journeys for the succeeding block.

Exemption available only in respect of two children

The exemption relating to LTC shall not be available to more than two surviving children of an individual after 1.10.1998.

Exception: The above rule will not apply in respect of children born before 1.10.1998 and also in case of multiple birth after one child.


  1. In case the LTC is encashed without performing the journey, the entire amount received by the employee would be taxable.
  2. Family for this purpose includes:
    1. the spouse and children of the employee;
    2. parents, brothers & sisters of the employee, who are wholly or mainly dependent upon him.
  3. The exemption can be availed for the journey undertaken while on leave during the tenure of service or even after retirement/termination from service.
  4. The exemption is allowed only in respect of fare. Expenses incurred on porterage, conveyance from residence to the railway station/airport/bus stand and back, boarding and lodging or expenses during the journey will not qualify for exemption.
  5. Exemption is available in respect of shortest route. Where the journey is performed from the place of origin to different places in a circular form or in any other manner, the exemption for that journey will be limited to what is admissible for the journey from the place of origin to the farthest point reached, by the shortest route.
Index of Exempted Incomes (Section 10)



Related Topics.... Exempted Incomes :

List of Exempted Incomes (Tax-Free) Under Section-10
Section-wise Index of Exempted Incomes Under Section 10
Gratuity Received by a Non-Government Employee covered by Payment of Gratuity Act, 1972 [Section 10(10)(ii)]
Gratuity [Section 10(10)]
Commuted value of Pension Received is Exempt from Tax [Section 10(10A)]
Amount received as Leave Encashment on Retirement [Section 10(10AA)]
Retrenchment Compensation received by Workmen [Section 10(10B)]
'Retirement Compensation' from a Public Sector Company or any other Company is Exempt from Tax [Section 10(10C)]
Any sum received under a Life Insurance Policy [Section 10(10D)]
Exemption in respect of Amount Received from any Provident Fund (PPF/SPF/RPF/URPF) [Section 10(11), 10(12)]
Payment from Superannuation Fund [Section 10(13)]
House Rent Allowance-HRA [Section 10(13A) Read with Rule 2A]
Any Allowance given for meeting Business Expenditure [Section 10(14)]
Interest Incomes [Section 10(15)]
Income of certain Funds of National Importance, Educational Institutions and Medical Institutions [Section 10(23C) and Rules 2C and 2CA] :
Income of Core Settlement Guarantee Fund [Section 10(23EE)]
Any income of a Corporation established for Ex-Servicemen [Section 10(26BBB)]
Certain Interest to Non-Residents [Section 10(4)]
Leave Travel Concession or Assistance (LTC/LTA) [Section 10(5)]
Salary or Remuneration to Foreign Employee and Non-Resident Member of Crew [Section 10(6)]

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