As far my knowledge goes there is no specific limit to the payment of LTA. It is just a matter of your company's decision / salary breakup. However LTA is exempt while calculating I tax, only to the extent of "minimum of the following"
1. Amount of expenses actually incurred by the employee for LTA (for travel - only air,rail fare - not any other like boarding & lodging)
or
2. The amount of LTA received by the employee
However there are various provisions in the IT act regarding this above. A few are mentioned for your immediate reference :
* LTA can be claimed for only 2 journeys in a period of 4 calender years (called the block - the current block is 2006-2009)
* The Employee should provide the tickets, boarding passes as proof of journey to the employer & the employer has to retain it.
For further information you should consult a Income tax ready reckoner.
Regards
MS