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've submitted PF transfer form to my current employer 6 months before, But it seems that my previous employer is not clearning the amount. Can my previous employer anyhow control that amout, which it has already subitted to PF dept.
Amit,
For EPF transfer, the previous employer cannot stop the amount being transferred to another employer. In case he is, you can file submit a written request as RTI to your current regional PF commissioner (RPC) asking for status of your PF transfer.
Hello Pankaj,
As per my salary structure, I am eligible for an annual leave allowance. In my self declaration to the finance team of my company, I had indicated that I would be availing the entire amount available under LTA, for my personal travel . Now, if I fail to provide the boarding pass & flight tickets, would the entire amount eligible under LTA taxed at 30% flat? Please advice.
@Hardik,
Please fill your company's travel reimbursement form and submit without the proofs. They should not deduct tax then.
Thanks Pankaj.
Hi,
Just wanted to check what are the proofs i can submit while filing my returns to reduce my tax liability and claiming a refund
Is it that all the docs should have been submitted to my employer?
@Lavanya,
You cannot submit any proof or any other attachment with your income tax return. Whatever you fill and declare in your return will be considered as it is.
Hi Pankaj,
As per your rpely to Lavanya's query we cannot submit any income tax proofs while filing for return; then how would be claim the refund?
I was unable to submit my IT proofs to the company by 31st march 2009, because of which my savings (Policies, Tax saver funds, NSCs, HRA receipts etc.) were not taken into account and tax was deducted for the month of march. Does this mean that I wouldn't be able to get any refund? If no, then how would I claim w/o submitting proofs?
@Himani,
We cannot submit any tax proofs along with return but we can declare them in return form. Whatever you declare in ITR form, will be considered true and tax computation will be done on that. You can show all investment for tax saving and claim refund for that.
In case they need proof, they can ask you later by sending a query to your address.
Hi, Thanks for the update, also is there a limit for the income exemption i can claim under sect 10?
I have made two trips one in May 2008 and the other in Jan 2009 and would like to claim the both under LTA.
I have not claimed LTA prior to this. My taxi bills are working upto nearly 20K , can i claim the deduction under sec 10.
@Lavanya,
In a financial year, you cannot claim LTA twice. As both of your trips were in financial year 2008-09, you have to choose one.
Hi,
I have shifted my job in Jan 2008. This year I have travelled and i an eligible for LTA claim from my current employer. However can I claim LTA amount from my previous employer after tax ? Form 16 provided by my previous employer does not have any LTA component.
@Shiv,
No, LTA has to be claimed only from same employer during employment period. It can not be claimed after you left the company.
Hi, my company's system allows me to specify flexible amounts under various heads including LTA. If I increase my monthly LTA deduction above default value (Monthly Basic/12), it still shows the total amount as non-taxable. With reference to that, how much is the upper limit one can claim as LTA. Is it one monthly basic or a different amount ?
@Kevs
LTA has limit of one month basic salary per annum. Any amount above this will be taxable.
Do we have any Section or rule states the same, can u please confirm
Its under Section 10(5).
Since as per the Supreme COurt decision, Employer has no obligation to collect LTA proof, can a company give exemption based on declaration Please advise
@Ramesh
Yes, company can given tax exemption based on written declaration from employee.
Hi Pankaj,
I am going to a remote location in ladhak. For that i have to take flight from delhi to leh & after couple of days of stay in leh I will hire taxi to go this remote place & stay there for one night. Cost of taxi will also be significant. Can I claim both air & taxi fair for Tax exemption in LTA. If yes it will be great if you can provide couple of links to govt sites (only to convince finance dept. people here.
Regards,
Hemant Batra
@Hemant
Yes, you can claim both air and taxi fares for travel. As per rules it should be from same visit.
Kindly provide link to some offical site specifing rules (only to convince finance dept. people in my office)
@Hemant
There is no clear notification of same on Govt site. Below is the link about LTC on income tax website:
http://www.incometaxindia.gov.in/publications/1_Compute_Your_Salary_Income/1_Income_from_salary.asp#LEAVE%20TRAVEL%20CONCESSION
It puts a limit on amount claimed ::
hi
I plan to travel from 24 the dec 2009 and return on 3rd jan 2010. Will i be eligible for LTA claim for 2206 -2009 block.
I appriciate your response. thx
@Vinod
There is no clear information available whether travel should have been completed in the block year or only start date should be in between.
I suggest you to claim this in 2006-09 block itself.