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).”
Here is the link to court appeal
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I have joined my present company in Nov'2010 . Company says I cannot accumulate my LTA claim for 2010-11 and will have submit the travel bills or else the income would be offered to tax . I am still on probation and not a confirmed employee and hence cannot take any leave to travel and make my LTA tax free. Can I carry forward my LTA amount of 2010-11 and claim the same in 2011-12 alongwith the LTA amount of 2011-12.
@Ajit
You can talk to your employer if they can defer your LTA payment in 2010-11 and pay the same along with 2011-12 payment in LTA claim.
It solely will depend on your employer's take on it. There is no official carry forward rule of LTA, by which yearly allowance can be added to next year.
Hiiiiii
2 times in period of 4 years means...??? any two financial year
(i mean multiple travel in single year) or only two trip travelling???
Can i claim LTA exemption for any two financial year out of this four year block??
suppose i have travelled two times (for example in June and in Dec 2010) in one financial year, then will this be considered as one time claim or two time claim??
@Bhavin
You can only claim income tax deduction twice for travel done in a block of four years. Also it only be claimed once in a calender year.
Block of four years has been fixed by Govt. Current block is Jan 2010-Dec 2013.
So you can claim any two travels done between Jan 2010 and Dec 2013, but these two should not fall in same calender year.
Hi, I am in banglore. I rome through the kerala with some package tour. this package include all (Private Transportation , air ticket , hotel stay,etc...) Now When I claim under my LTA. They did not consider this as LTA. They say package tour will not consider for LTA. If I submit the bording pass of air ticket only that part will be consider as LTA. One of my relative travel same way as I travel and the got this under LTA.
Please let me know can I claim this is as my LTA or not?
Thanks in Adv.
@GKP
Leave travel allowance is exempt from income tax within certain limits as under : -
(a) Where journey is performed by rail; railway-fare in Second AC class by shortest route to destination.
(b) Where places of origin and destination are connected by rail but the journey is performed by any other mode then Second AC class fare by shortest route to the place of destination.
(c) Where place of origin of journey and destination, or part thereof, are not connected by rail and journey is performed by any other transport; then
(i) If a recognized public transport system exists between such places the first class or deluxe class fare of such transport by shortest route, or,
(ii) If in other case, Second AC class fare for the distance of the journey by the shortest route, as if the journey has been performed by rail.
So, your employer is right in considering only the air ticket part of travel.
Not sure, how your relative's employer considered whole amount. He may run into issue in case of scrutiny from income tax department.
Hi Pankaj,
Thanks for the reply. My relatives is bank employee. I believe we have diff rules in govt bank and private ogr. like we have LTA and govt and bank employee have LTC. This is reason why they got that. Please let me know is this correct?
Thanks,
Gautam
@GKP
Leave Travel Allowance(LTA) is a part of Cost to Company(CTC). Even if one don't claim will get this amount after tax deduction. Most of the private organizations offer LTA. Whereas LTC is over and above CTC. If one travels, he/she will get payment for the same amount. If one does not travel, he/she gets nothing. LTC is generally provided in Govt and public sector organizations.
But both of these components only provide exemption for travel done and not for hotels and other charges.
can i claim taxi bill in LTA
@Sandeep
Yes, you can.But maximum exemption you will get is public transport fare (train/bus/airfare) between cities traveled.
Hi Pankaj,
Is it necessary to take 5 days leave to apply for LTA?
@NiravB
It depends on company policy. Some employer have policy of minimum 3 days, some don't even have such minimum days policy.
Dear Pankaj,
If i go along with my wife to sone destination and my dependent parents wish to go to another destination during the same time period, will I be able to get LTA and tax exemption on the same?
@Pankaj
For LTA claim, you must travel along with dependents in the same journey.
Hello Pankaj,
I am Haryana Government employee and got 35000 as LTC. I have taken leave for 4 days for LTC. I have performed the whole four days journeying in my own car. I stayed at relatives residences on the way. In toto I don't have any proof of my stay in hotels and any travel tickets. Now my questions are:
1. Can I claim tax exemption for whole 35000?
2. What proofs will I have to submit to my DDO for tax exemption?
Thanks and regards.
Vedpal Yadav
@Vedpal
You will have to provide some evidence of journey performed. Bills from any taxi tour company will also help.
But there are low chances that whole 35000 is considered for tax exemption, because as per Govt rules, only public transport fare will be considered at max.
If travel places are connected by public transport like air, train or bus, then fare of any of these for shortest route will be considered.
Does the taxi bill should necessarily have BST/CST/Sales Tax Number on it?
@Roshan
Yes, this is in order to avoid any fake receipts.
Hello Pankaj,
how much amount would be deducted as tax from my LTA of Rs. 65000 p.a.
Regards,
Kavita
@Kavita
In case you don't claim exemption for travel done, LTA will become taxable and will be taxed as per your income tax slab rate (which may go upto max 30%).
HI, I travelled by air with my family but I have 2 tickets . In one ticket is for me/husband/son and other seoarate ticket with same airlines/same date of my parents . Can I claim for both tickets or only those in which my name is included.
Please reply
@Anu
For Air travel, boarding pass is needed as a proof.
You may travel along with your dependents to claim exemptions, but all must travel together on same date and flight. You will have to show boarding pass for all travelers of same flight.
Dear Pankaj,
Please let me know how to Claim Income Tax relief under section 89 (i).
Regards,
Sudip
@Sudip
You can compute tax exemption and fill Form 10E in order to claim exemption.
Form 10E can be downloaded from http://www.incometaxindia.gov.in/forms/10e.pdf