LTA Block Years

What are LTA Block Years?

LTA block years are the four-consecutive-calendar-year windows fixed under Section 10(5) of the Income Tax Act, 1961 read with Rule 2B(2) of the Income Tax Rules, 1962, within which a salaried employee may claim Leave Travel Allowance exemption on a maximum of two domestic journeys. Each block is statutorily defined; employees and employers cannot pick their own four-year window. The current block runs from 1 January 2026 to 31 December 2029, immediately following the 2022-2025 block.

The block year framework is one of the most misunderstood features of Indian salary taxation. It is not a personal accumulator that resets when an employee joins a new company, nor does it follow the financial year. It is a fixed calendar-year cadence that applies uniformly across India.

Tax Treatment Under Section 10(5)

Section 10(5) read with Rule 2B exempts the actual cost of travel by the shortest route within India incurred during the employee’s leave, subject to:

• A maximum of two journeys per block of four calendar years
• One carry-forward journey from the previous block, usable only in the first calendar year of the new block
• Travel must be domestic only — no international leg, even for an Indian destination on the way
• Only transport fares are exempt — not hotel, food, sightseeing or local transport at destination
• Cap on mode of travel: economy class airfare, AC first class rail fare, or equivalent on the shortest route

The exemption is available only under the old tax regime. Employees opting for the new tax regime under Section 115BAC have the entire LTA component taxed as salary. See the broader treatment in Leave Travel Allowance (LTA).

The Block Year Schedule

Within the current 2026-2029 block, a salaried employee can claim tax exemption on:

• Two journeys at any time during 2026, 2027, 2028 or 2029
• One additional carry-forward journey if they did not exhaust both claims in the 2022-2025 block, usable only in 2026

So the maximum number of LTA-exempt journeys in calendar year 2026 alone is three: one carry-forward plus the first of two regular claims for the new block.

Calculation Example

Anita, a Mumbai-based engineer on Rs 30,00,000 CTC, took zero qualifying LTA journeys during 2022-2025 and is taxed under the old regime. Her CTC includes Rs 60,000 per year as LTA. She plans family travel as follows:

Total tax-exempt LTA across 2026-2029 in this scenario equals the actual travel fares, capped at the LTA component received. Because Anita’s annual LTA is Rs 60,000 (Rs 2,40,000 across the block) and her actual exempt travel fares add up to Rs 1,60,000, all the travel fares are exempt up to that amount and the residual Rs 80,000 of LTA is taxed as salary in the years it was paid.

If Anita had instead opted for the new tax regime, the entire Rs 2,40,000 LTA across 2026-2029 would be taxable salary irrespective of her actual travel.

Common Employer Pitfalls

1. Confusing calendar block with financial year. Some payroll teams reset LTA tracking on 1 April. The correct cadence is 1 January, and the block straddles four financial years (FY 2025-26 to FY 2029-30 for the current block).
2. Allowing more than two regular claims. Even if the employee submits travel proofs every year, only two journeys per block qualify. Additional travel is fully taxable LTA.
3. Granting carry-forward beyond 2026. The carry-forward journey from 2022-2025 must be completed by 31 December 2026. A trip in 2027 that the employee labels as “carry-forward” is invalid and should be denied.
4. Skipping prior employer history at onboarding. A new joiner may already have claimed both regular journeys at their previous job. The new employer must collect the LTA claim history through Form 12BB and prior Form 16 to avoid double-exempting.
5. Allowing LTA exemption under the new regime. Automated payroll rules must check the employee’s regime selection. Granting exemption to a new-regime employee creates a TDS shortfall surfaced at year-end.

Recent Changes and 2026 Updates

The 2026-2029 block began on 1 January 2026 with no statutory amendment to the block-year mechanism itself. The Section 10(5) framework, the two-journey cap, the calendar-year cadence and the carry-forward rule remain unchanged from prior blocks. The COVID-era LTC Cash Voucher Scheme that allowed employees to claim LTA against goods purchases instead of travel was a one-off relief for 2020-2021 and has not been reintroduced.

The default new tax regime continues to deny LTA exemption, which is the single largest practical change affecting LTA in recent years. For employees who genuinely travel and itemise deductions, the old regime with LTA, HRA and Section 80C continues to outperform the new regime. For most others, the new regime with the higher Standard Deduction wins.

For a fuller treatment with worked examples, see the Leave Travel Allowance India guide.

How Omnivoo Handles LTA Block Years

Omnivoo tracks LTA claim history per employee across calendar block years, automatically distinguishing carry-forward eligibility from regular block claims, and refuses exemption beyond the statutory two-journey-plus-one-carry-forward limit. During onboarding the platform collects prior employer LTA history through Form 12BB so the running balance is accurate from day one. When an employee opts for the new tax regime, the LTA component is automatically shifted into taxable salary for that year without any HR intervention.