In the case of an individual, the value of any leave travel allowance or assistance received by, or due to, him,—
(a)  from his employer for himself and his family, in connection with his proceeding on leave to any place in India;
(b) from his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service,
For the purposes of this clause, “family”, in relation to an individual, means—
  (i) the spouse and children of the individual  and
 (ii) the parents, brothers, and sisters of the individual or any of them, wholly or mainly dependent on the individual
The exemption is available only for two surviving children. However, in the following two cases, the exemption is available for more than two children.
·                          All surviving children born before October 1st , 1998
·                          There is a case of multiple births after the 1st child

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Calculation of exemption:
The amount of concession in this section will not exceed the amount actually incurred in any case.
Journey by air – Economy fare of the national carrier by the shortest route.
Journey by rail – 1st Class AC rail fare by the shortest route to the place of destination
In a case place of origin of journey and destination are connected by rail and journey is performed by any other mode than air – 1st Class AC rail fare by the shortest route to the place of destination.
In a case, place of origin of journey and destination(or part thereof) are not connected by rail and
·                          Recognised transport system exists – 1st Class or the deluxe class fare of such transport by the shortest route to the place of destination.
·                          Recognised transport system exists – 1st Class AC rail fare by the shortest route (as if the journey had been performed by rail)
If an employee receives LTA on per year basis and he doesn’t utilize that amount in a year then the amount is carried forward to next year(s). For eg an employee receives rs. 10,000 per year he doesn’t utilize that amount in a year, now rs. 20,000 can be allowed as a deduction in next year if he uses such amount as per above provisions.
Notes:
·                          Only 2 journeys in a block of 4 years are exempt.
·                          If the assessee had not availed concession or availed concession only one time in a block of 4 years, then the assessee can carry forward one of such concession to the first calendar year of the next block.
·                          Current blocks are 2010-2013 and 2014-2017 (Calendar years)
·                          This exemption is available for air, rail and bus fare only. Taxi charges, boarding, and lodging etc are not allowed as deduction.
·                          Exemption is allowed only when the person claiming the deduction is also traveling. If the only family is traveling then the deduction is not allowed.
·                          Proof of travel expenses is not initially required but advised to be kept handy.

·                          Form 12BB is to be filed with employer if you want your employer to take deduction under this section into consideration and thus deduct lower TDS