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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Hi Pankaj,
I have not taken LTA from the past three years from My employer. In our company gives LTA every 2 years. My questions here is :
1. What is the time limit to avail LTA?
2. Can I take just before leaving company?
@Suresh
Income tax exemption on LTA can be availed twice in block of four years. Currently 2010-13 block is in progress.
There is no time limit to claim LTA exemption. You can avail it before leaving company too but your employer must approve your leaves for the same.
Hi, I had declared INR20k as LTA in my income tax declaration however while claiming it from my company (Pvt ltd, MNC) they refused to take my Taxi hire bill with the trip sheet stating they would need a secondary proof like ATM/CC transaction done at the travel place, lodgin bill, any purchase bill for me to claim the LTA. I am aware these secondary proof is not required however my company did not process the claim. Now i have the bill, can i produce it while filing my IT returns along with my form 16, to get a tax refund from the government. I have lsot around Rs5k as tax due to this.Please advise.
@Huzefa
Generally taxi fare bills are not accepted for LTA claim. In order to make your claim valid, they are asking any other proof of travel.
You cannot claim same now in income tax return and nothing more can be done in this case.
Only thing you can do is convince your employer and get it corrected in Form-16, i.e. get it removed from taxable component.
Hi.. I have taken the air ticket through internet (eticket and not original ticket) and i will provide the boarding pass to the company as a proof... will that be enough as i am not providing oriignal ticket (booked through interent) ?
@Ashish
Boarding pass is enough for showing travel proof. You should be able to claim LTA with boarding pass and e-ticket copy.
Hi Pankaj,
I travelled the following way:
5th March - Bangalore to Kolkata - with Family - By Jet Airways (cost ~20000)
9th March to 12th April I was working remotely
13th April - Kolkata to Bangalore - with family - By Jet Airways (cost ~20000)
Note: There is a gap of 1 month between complete round journey.
Can I claim whole 40000 from LTA (both side journey)?
Regards,
Prasad
@Prasad
Your return trip won't be accepted for LTA claim. As it can't be considered as leave travel because you were not on leaves in between.
Hi,
I travelled From Hyderabad to Delhi by Air and From Delhi I went to Manali by Road. Can I claim LTA for both. The mode of transport changed in Between
@Kalyan
As there is no flight between Hyderabad and Manali, part air travel and part road travel can be claimed.
But there should not be a gap in between (in Delhi).
And only fare on public transport (bus/train) will be considered for exemption on Delhi-Manali route.
Hi Panjak,
I changed my job in Nov2010, My pervious company did my final settlement and TAXED my LTA, but in Jan2011 I travelled and claimed my LTA from new company.
so they they are giving me tax benefit only on amount for which i was in there employment. Can i claim Full refund while filing returns? how it do it?
@Avinash
LTA is a employer provided benefit and once you leave an employer, that amount cannot be claimed for tax exemption.
New employer can only approve claim from their portion.
You may try claiming the same while income tax return filing but there are high chances that tax officer will raise a query and ask for explanation of refund.
To do that, just reduce your taxable salary by non-taxable LTA amount.
Hi Pankaj,
I recently joined an MNC and my CTC is Rs 295000/- being a women how much amount is taxable in my case.
I am living in a rented house and the rent is around 50000/- per annum and I am spending around 45000/- per annum for my child's education are these sufficent or i still need some more to escame any taxes.
Regards
Pallavi
@Pallavi
Without knowing CTC breakup, it won't be possible to compute income tax liability.
Please download income tax calculator from http://www.pankajbatra.com/india/income-tax-calculator-india-2008-2009-2010/ and calculate income tax yourself.
Regarding income tax saving, please read following pages too:
http://www.socialfinance.in/questions/7/tax-saving
http://www.socialfinance.in/questions/45/investment-advise
Hi Pankaj,
here r my compensation break up
Basic 85260
hra 34104
conveyance allowance 9600Medical 15000
Lta 10658
Special allowance 78747
Companys contribution to PF 10231
Variable pay 28000
Statutory Bonus (in advance) 8400
Gratuity 4242
Insurance 9944
Total CTC 294186
Regards
Pallavi
@Pallavi
Please download tax calculator (from http://www.pankajbatra.com/india/income-tax-calculator-india-2008-2009-2010/) and compute income tax liability yourself.
My employer is saying that we need to be on leave for at least 5 working days if we want to apply for LTA. I cannot find this rule any where. Is there a such rule where we have to a minimum number of paid leaves to be eligible for LTA
@Sumit
There is no as such standard/official rule for minimum number of leaves required to claiming LTA.
Every company has its own policies enforced. In my previous employer, it was just 2 earned leaves.
I am travelling from Delhi to Dalhousie via cab (road). Can I claim taxi bills for LTA? There is no direct train from Delhi to Dalhousie (Himachal) but there is train from Delhi to Pathankot and from there bus is available as a public transport.
@Lokesh
As per Govt rules, Maximum amount which will be non-taxable, will be Delhi Pathankot Train fare + Bus fare from Pathankot to Dalhousie.