From now on, Employee will not have to submit proofs as evidence, to their employers for getting LTA (leave travel allowance) reimbursement.
Supreme court of India gave ruling that employers, while reimbursing LTA claims of their employees, are under no statutory obligation to collect evidence and provide them to tax authorities.
As per Income tax rules of India, if transport bills for LTA are not provided, the amount will be taxed. E.g. If an employee has LTA allowance as Rs 50,000 in his CTC(cost to company), and he provides proofs of Rs 40,000 (boarding pass, air tickets, taxi vouchers) then income tax will be deducted for rest of the Rs 10,000. Does not matter whats the amount of LTA in an employee’s package, income tax laws only permits domestic air tickets only for LTA claim.
This court order came after a hearing of case between Larsen & Toubro and income tax department of India. Income tax department had argued that employer has to collect proofs from employee for LTA. Rejecting this, the supreme court in its order said: “The beneficiary of exemption under Section 10(5) (of the Income Tax Act) is an individual employee. There is no circular of Central Board of Direct Taxes (CBDT) requiring the employer under Section 192 to collect and examine the supporting evidence to the declaration to be submitted by an employee(s).”
Related posts:
Dear Pankaj,
Please reply to following queries with given assumptions of getting LTA of Rs 100 per year.
1) I claimed exemption of Rs 100 in 2006. Now I accumulated it for rest 3 years i.e. Rs300, and incurred actual expense of Rs 350 in year 2009, what amount of exemption I can claim?
2) Can I claim for Rs 200 in yr 2007 and Rs 200 in yr 2009 for current LTA block, having been incurred an actual expense to that extent in respective years 2007 & 2009, i.e. twice in block?
Thanks,
Nilesh
@Nilesh
It depends on your employer, if he allows accumulation of LTA amount, then you can claim the whole accumulated amount in one year.
You can only claim twice in a block of 4 calender years. This block is defined by government. Last block was 2006-2009. If you have claimed exemption in 2006. You can only claim once in rest 2007-2009 period.
Hi,
I have a query. I work at Aurangabad, MH and rencently went on leave to native place Trichy in TN. There is no direct flight between Aurangabad to native place Trichy. Hence I travelled as below – I travelled in a taxi from Aurangabad to Pune and from Pune I took the flight to Chennai and again from Chennai I took a taxi to Trichy and return is also the same route. So whether can I claim the taxi as well as the air fare for the LTA.
Kindly clarify
@Oulag
If a recognized public transport system exists between such places, the first class or deluxe class fare of such transport by shortest route, will be taken into account.
hi
i have clamp LTA for twoyear block, i am travel though higer a taxi car amount is 48000/- .my account dept has deceted 4350/- for a tax please guide