Leave Travel Concession (LTC) :- This term is used in case of salaried employees only. When any employee visits any place in India on leave or after retirement or after termination of his employment and he gets any concession or assistance from his employer in respect of his expenditure relating to this personal tour then it shall be treated as Leave Travel Concession. This type of tour includes his spouse, children and dependent parents. Any concession received from the employer for above type of tour shall be exempt from income tax. Amount of exemption shall be only the amount spent on tour. For example Mr. X got Rs.20000/= as Leave Travel Concession but he spent only Rs.12000/- then the balance Rs.8000/= shall be included in his taxable income. Tour expenditure includes air fare or rail fare or bus fare or taxi fare etc. subject to certain terms and conditions.

The exemption is available to an individual only for two journeys only during a block of four years. First block being of 1986-1989 and second block being 1990-93 and so on. How ever, such concession is not availed by any employee during a block of four calendar years; an additional journey can be availed in the first year of the next block.


For block years of 2010-2013, Mr. Y availed the Leave travel Concession during March’2011. He availed the second journey in March’2014 for block of years 2014-17. Is it exempted from income tax and how many journey he can make in block of 2014-17 to avail income tax exemption?

Solution: Mr. Y can get exemption from income tax for the journey during March’2014 because one remaining journey of previous block is exempted from income tax if it is availed in first year of next block. March’2014 is first year of block 2014-17. Therefore, he can avail this journey and can get exemption from income tax. He can avail the exemption of two more journeys during the block of 2014-17.