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,
Nice to see some very useful information regarding LTA here.
I also have a query regarding LTA claim and would like to get it clarified from you.
I have been working from past 5 yrs but never opted and claimed for LTA. I have seen some where that if you fail to take the exemption in the first block of four years then you could carry forward maximum one exemption to the next block and avail three exemptions in the next block of four years.
Q.1. Can I claim LTA 3 times in next 2 yrs as I have not claimed it in previous block and for the current block (2010-13) next 2 yrs remaining ?
Q.2. Is it possible to include LTA claim while filling the IT-returns if I have not opted for LTA in the beginning of the financial year (if I have the proof - air ticket, train ticket etc.) ?
Q.3. Is it possible to claim 2 travel in a single year considering that I have one carry forward exemption from previous LTA block ?
Thanks,
Dilip
@Dilip
1. LTA can be claimed max twice in block of four years. This is also further allowed for maximum one travel per calender year.
If not availed, One LTA can be brought forward and claimed in the first year of the next block.
Current ongoing LTA block is Jan 2010-Dec 2013. So if you wanted carry forward from previous block, you should have claimed LTA for travel done in 2010. As it was not done, now you are only eligible for two claims before Dec 2013, one each for 2012 and 2013 calender year.
2. LTA is employer provided benefit and should only be claimed with employer. There is no provision to claim LTA deduction in income tax return form. If you reduce taxable income and file income tax return, income tax department may raise notice for explanation.
3. Only on travel in a calender year can be claimed maximum.
Hello Pankaj,
thanks for the valuable information. I want to know that is the LTA is applicable only if I am on leave. I traveled to my home town but was not on leave and was in Working From Home. Can I able to apply LTA?
@KK
Most of the employer have policy of minimum 2-3 earned leave for LTA claim.
If you were working during leaves, it won't be accepted as leave travel.
My son is at Germany doing his MS. I provided for Tution fee of Euro 500 & Euro 6900 for his living expenses. Any benfit can I acquire at my Income Tax. I'm a Pvt Company employee and a tax payer.
@K Viswanathan
Institute must be in India to claim tax benefit for children tuition fees u/s 80C.
Could you please confirm , whether i can claim LTA for travel taken in March 2012 period , in the Financial Year 2012-13?
I will be travelling and taking Paid leaves in the month of March 2012. Can i claim this LTA exemption in the next FInancial year, as the window for submitting claims in my Company is closed?
Can i Claim LTA Exemption for travel taken in March 2012, in the next Financial Year. I am referring this on the basis of the travel block applicable for LTA.
Please guide.
Regards,
Darshan.
@Darshan
Your query was already answered on http://www.socialfinance.in/questions/2436/lta-claim-query
@pankaj, Many thanks for the reply , i shall follow the link in that site.
Thanks again for your time.
Regards,
Darshan.
I have done one Bima Nibesh, LIC of 99000, And Sum Assured is 100000. This is one time deposite for five year, One time premium. is the calculation for IT considering only 20,000/- instead of 99000.00 in Life Insurance Premium ? . Can u please help on this?
@Rama
For one time premium payment insurance, you can claim whole amount paid in financial year in that year return.
You would consider whole 99000 under 80C deduction.
in my company, i am entitled for 24000Rs. LTA P.A., This is being paid every month as a part of salary 2000Rs Per month.
Last month i submitted my LTA Bill (Road Travel Taxi bill with Toll receipts) for Rs. 20000.
The company is giving me benefit of Rs. 6000 only with the following remarks;
""As per Income Tax Act,1961 in case of road travel where proper proofs has been submitted,benefit amount will be AC first class Rail fare by the shortest route (as if the journey had been performed by rail)."
Please advise whether it is true, that even if we are eligible for 24000Rs LTA P.A., we will not get actual road travel expenses rebate. what Rebate an employee is actually entitled for in case of LTA, Irrespective of his LTA amount in CTC.
If we are entitled for higher amount, how do we put our case before company with relevant income tax details.
Pls advise.
Regards,
asb
@Aradhya
Your employer is right in allowing income tax benefit for LTA for amount Rs 6000 only.
LTA income tax deduction is available only under certain limits like you should travel in India only and use public transport for travel (bus/train/air).
Hence at maximum economy class airfare or first class AC train fare would be non taxable no matter how much you claim for.
In your case, now Rs 18000 in year would become taxable and rest 6000 non taxable as per LTA rules.
Hi Pankaj,
I am a probationer employer in current organization. I have gone for holiday for 4 days & I have utilized my Sick/Casual leave for the same. As per my organization, I can only claim LTA if I have 'earned leave' of 3 days, but as I am a probationer, I have 0 in earned leave. My question is, now if want to claim LTA, my current organization may not accept it so can I directly claim it to IT department & ask for for the rebate on the TAX.
Thanks in advance....
@Koustubh
LTA is employer provided benefit and generally it cannot be claimed while income tax return filing.
In fact, there is no option in income tax return form to claim for LTA deduction.
You should talk to your employer, present your case and sort out with them itself.
Hi Pankaj,
if I and my family (4 members) travel in flight from Bangalore to Ahmedabad
And 2 family members flow back to bangalore. and the other two, including me flow to Kolkata from ahmedabad.. whole tour- 10 days duration, Leave sued- my casual leave.
now my questions are
1. to claim LTA , should all the travel be made in Air India
2. Can I claim the flight fares of 2 of my family members who are travellign back to Bangalore( since I am not travellign with them).
3. can i avail the reimb for the in between care rentals which are taxi cabs.
@Arshad
1. There is no requirement of traveling in Air India for LTA claim. However maximum tax exemption you would get is airfare on same route on national carrier Air India. Say you paid 6000 per person for air ticket on Jet airways, but airfare on Air India was 5500 on same route, then only Rs 5500 would be non taxable.
2. All travelers for which claim have been made, should travel together to claim tax benefit.
3. Bills paid for car used in city for travel etc won't be exempted.
Hi Pankaj,
I travelled with my family from Delhi to Nanded via Taxi. Now, how can i claim LTA for all family members as Taxi bill will not mention number of persons travelled and if shortest route by train is calculated for single person or for all members travelled?
Thanks
@Rohan
You can write all person's name and relation in claim form and it should be acceptable to employer.
Shortest distance fare would be multiplied by total number of person traveled for computing deduction.
Please note that travelers should be family members and dependents only.
Hello Pankaj,
I have a similar query as Arshad.
I am planning to go to Tirupati from Pune via Bangalore i.e. Pune to Bangalore via flight, Bangalore to Tirupati round trip via a daily tour. From Bangalore, me and my wife wish to fly to Mumbai and take a train to Indore; whereas my parents would fly back to Pune from Bangalore.
My question is:
1. Can I claim the tickets of my parents too (for onward and for return)? (Pune - Bangalore - Pune for my parents and Pune - Bangalore - Mumbai - Indore - Pune for me and my wife)?
2. What if we all fly back to Pune and then I travel to Mumbai to take the train to Indore; can I claim all the tickets? (Pune - Bangalore - Pune - Mumbai - Indore - Pune)?
I am sorry if it is a bit confusing.
Thanks & Regards,
Sumeet
@Sumeet
1. All passengers must travel together to claim LTA deduction. If your parents are not returning back with you, you won't be able to claim that return travel expenses for parents. As they went with you on on-wards journey, that can be claimed.
Even for your claim, only shortest distance route would be considered for tax exemption. Even if you travel to Pune-Bangalore-Mumbai-Indore-Pune, only Pune-Bangalore return fare would be considered for claim.
2. Only one travel can be claimed in a calender year. If you travel to Bangalore, come back and then goto Indore, either Pune-Bangalore or Pune-Indore travel can be claimed.
Hello Pankaj,
Thank you so much for your reply! Our HR is absolutely not helpful in this regards, they say yes to almost anything and at the last moment raise their hands up!
Finally, what I have decided is to travel from Pune - Bangalore with my wife and parents, then me and my wife will fly to Indore directly from Bangalore. We will return to Pune from Indore.
In such scenario, can I claim Pune - Bangalore (only onward) for 4 of us and then Bangalore - Indore - Pune for me and my wife.
Hope this claim will be within laws. Let me know.
Thanks & Regards,
Sumeet
@Sumeet
You can claim Pune-Bangalore for all four persons traveled. For Bangalore-Indore-Pune you can claim for you and your wife, but only shortest distance fair between Bangalore-Pune would be non-taxable as per govt rules.