Rule 278: Exempt leave travel concession: limits and two journeys in a block
Rule 278 sets the conditions for the exemption under Schedule III [Table: Sl. No. 8] for travel concession or assistance from an employer for travel in India on leave or after retirement or termination. The exempt amount is the amount actually spent, subject to fare caps by mode. Two journeys are allowed in a block of four calendar years starting 2022, one unused journey can be carried over, and the exemption is limited to two surviving children.
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Bare law
Rule 278 - Conditions for purposes of Schedule III [Table: Sl. No. 8] to the Act
(1) The amount exempted under Schedule III [Table: Sl. No. 8] to the Act in respect of the value of travel concession or assistance received by or due to the individual from his employer or former employer for himself and his family, in connection with his proceeding—
(a) on leave to any place in India; or
(b) to any place in India after retirement from service or after the termination of his service, shall be the amount actually incurred on the performance of such travel, subject to the following conditions:—
(i) where the journey is performed by air, the amount shall not exceed the fare admissible for the class of travel to which the employee is entitled, by the shortest route to the place of destination;
(ii) 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, an amount not exceeding the air-conditioned first-class rail fare by the shortest route to the place of destination; and
(iii) 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,—
(A) 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
(B) where no recognised public transport system exists, and no specific rates have been prescribed either by the Directorate of Transport of the concerned State or of any neighbouring State, an amount calculated at the rate of ₹30 per kilometre, for the distance of the journey by the shortest route shall be admissible.
(2) The exemption referred to in sub-rule (1) shall be available to an individual in respect of two journeys performed in a block of four calendar years commencing from the calendar year 2022.
(3) Where such travel concession or assistance is not availed of by the individual during any such block of four calendar years, an amount in respect of the value of the travel concession or assistance, if any, first availed of by the individual during first calendar year of the immediately succeeding block of four calendar years shall be eligible for exemption.
(4) The amount in respect of the value of the travel concession or assistance referred to in sub-rule (3) shall not be taken into account in determining the eligibility of the amount in respect of the value of the travel concession or assistance in relation to the number of journeys under sub-rule (2).
(5) The exemption referred to in sub-rule (1) shall not be available to more than two surviving children of an individual.
(6) The provisions of sub-rule (5) shall not apply in respect of children born before 1st October, 1998, and also in case of multiple births after one child.
Rule breakdown
Fare caps: Rule 278(1)
By air: the fare for the class the employee is entitled to, by the shortest route.
Places connected by rail, journey other than by air: up to the air-conditioned first-class rail fare by the shortest route.
Places not connected by rail, with recognised public transport: up to the 1st class or deluxe class fare by the shortest route.
No recognised public transport and no State-prescribed rates: Rs 30 per kilometre by the shortest route.
Number of journeys: Rule 278(2) to (4)
Two journeys in a block of four calendar years, starting with calendar year 2022.
If not availed in a block, one journey first availed in the first calendar year of the next block is also exempt.
That carried-over journey is not counted against the two journeys of the new block.
Children: Rule 278(5) and (6)
Not available for more than two surviving children.
This limit does not apply to children born before 1 October 1998, or to multiple births after one child.
Key takeaways
Actual cost
Exempt amount is what is actually spent, within caps.
Two in four
Two journeys per four-year block from 2022.
Two children
Limit of two surviving children, with exceptions.
Practical checklist
- Keep tickets and proof of actual travel cost.
- Track journeys claimed in the current four-year block.
Avoid
- Do not claim more than the fare for the shortest route.
FAQs
How many LTC journeys are exempt?
Two journeys in a block of four calendar years starting from 2022 (Rule 278(2)).
Can an unused journey be carried forward?
Yes, one journey first availed in the first calendar year of the next block (Rule 278(3)), and it does not count against that block's two journeys (Rule 278(4)).
What if I travel by car between places connected by rail?
The exempt amount is capped at the air-conditioned first-class rail fare by the shortest route (Rule 278(1)(b)(ii)).
Is there a limit on children?
Not more than two surviving children, except children born before 1 October 1998 and multiple births after one child (Rule 278(5) and (6)).
Glossary
- Block of four calendar years
- Four-year period starting with calendar year 2022 for counting journeys.
- Shortest route
- The route used to cap the exempt fare.