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 a query in LTA , If a person travel from chennai to mumbai with his wife and when he returns back to chennai he had left his wife in mumbai.
Whether this journey can be considered as LTA.
@Augustin
Yes, you should be able to claim LTA exemption in your case. You should show return fare for yourself and one way fare for your wife.
Hi Mr. Pankaj,
In case person travels with family(wife + kids) while onward journey, but in return journey person himself travels back few days before and family returns few days later.
Can the claim be made for the full travel ticket cost?
Thanks in Advance!!
@Mr Anonymous
All travelers must travel together to claim tax benefit.
So in your case, in the return journey you won't be able to claim for your family who did not returned with you.
HI Pankaj,
I am quite confident that I'll get solution from you.
I am entiteled for LTA Rs 20000 last year. Current year I am resigning my company exactly in mid of year and so I am entiteled for Rs 10000 and so Total of 30000. I dont have bills for this. So company is paying me all the amount and Rs. 10000 will be consider in billable amount. So my query is Is it possible to carry forward it. Like in form 16 I can use the same and can claim in next company.
Thanks
Aryan Oberoi
@Aryan
LTA is employer provided benefit and amounts from different employers cannot be clubbed for claim.
I have travelled by air from Mumbai to Amritsar. I do not have the boarding passes with me now. How can I claim exemption?
@Rachel
You can claim for travel done without boarding pass too with your employer, but later in case income tax department asks for proof, you should be able to show something as evidence.
My CTC has Rs. 60,000 towards LTA. I have not availed LTA yet for the current FY 2011-12. As per IT Act, Is my employer supposed to pay Rs. 60,000 to me after deducting tax or he should carry forward Rs. 60,000 to next FY since I have not claimed.
@Rama
Generally employers clear LTA amount in March end, after deducting taxes in case employee does not claim. But this policy is not a rule and some employer may only pay if you claim for the amount.
Does the LTA claim has to be from office location, i.e. my office is in mumbai, do i have to claim for a journey originating and terminating at Mumbai only or can i claim for any destination, e.g. can i claim for Delhi-Kolkata-Delhi as well.
@Umesh
As such there is no restriction on originating city for LTA claim. You should be able to claim any travel done inside India.
Hi,
Can i claim LTA tax benefit directly while filing the returns or only through employer?
Regards,
Sridutt
@Sridutt
You need to claim LTA benefit through your employer only. There is no option for LTA in income tax return form.
Hi All,
Let us suggest how to show LTA in balance sheet and what is provision to be taken in balance sheet during the blocking period.
I.e.
CTC 1,00,000
LTA 10,000
What is the best for an employer and employee.
01. Is it carry forward in balance sheet till the end of the blocking period.
02. Is it pay to employee at the end of the year after deducting tax as taxable amount.
03. If LTA pay at end of every FY, can an employee claim for the same in next year.
04. How to treat LTA in Balance Sheet.
05. How to show LTA in Form 16 (If it is treat fully taxable and non taxable).
06. If LTA pay at the end of blocking year, is it consider LTA income for that year in which its receive or that year in which it gained.
Kindly suggest all above.
If there is more for LTA for an employee and employer, please suggest.
Thanks and regards,
Naveen Kumar
Hi Pankaj,
Can i claim the LTA for travel in done in 2010. Actually i forgot claim that time.
If i can do then will i have to do through my company or file a revised return.
I am working on same company all these years.
thanks a lot,
Jaswant
@Jaswant
Claim for travel done in 2010 should have been done before end of financial year 2010-11. It won't be accepted now.
Also if at all we have to reflect previous LTA on revised ITR... will that be ok or a concern for IT department.
thanks,
Jaswant
@Jaswant
ITR does not have any field to show LTA claim. LTA claim has to be made with employer only.
I have travelled to Delhi in Dec 2011 and Kerla in Feb 2012? Can I combine both the trips to claim one LTA? Also can I claim these LTA in FY2012-2013 i.e after April 2012?
@Yogesh
Two trips cannot be combined for LTA claim. It has to be claimed separately.
As most of the employer process LTA once in a financial year, most probably your employer won't accept two travels done in same financial year.