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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sir ,
If my income before tax is 3,40000=00 , then how much tds will be deducted . should I subtract t std deduction i.e. 1,60000 from the amount before tax i.e. 3,40000=00.
that means 3,40000 - 160000 = 180000=00 . , finally 10 % of 180000 =00 or 10 % up to 300000=00 and 20 % on the balance amount. which comes tp 14000 +8000 = 22,000=00
or 18000=00
@Madan
Please use income tax calculator which can be downloaded from http://www.pankajbatra.com/india/income-tax-calculator-india-2008-2009-2010/
Hi Pankaj,
I joined my my current organization on 14 Nov '07. I haven't claimed LTA yet. I plan to claim LTA this year. I travelled on 21st Nov '09. my accounts deptt says I am eligible for LTA amount only from 15 Nov 09 to 21st Nov 09, as the LTA amount till 13th Nov 09 has been paid to me already.
I understand that the LTA can be claimed 2 times in 4 calendar years.
Please advice.
Thanks !!
Harinder.
@Harinder
LTA can be claimed twice in a block of 4 years. Last block ended in Dec-2009 (it was 2006-2009).
You can claim LTA for the travel done in 2009.
Even If your company has paid LTA amount after deducting tax, you can show them proofs and treat as non-taxable in income tax return.
Or, if they don't agree, no tax has to be deducted from the next LTA amount they pay your till 13th Nov 2010.
Hi, I did my travel during Dec 25, 2009 and Jan 05, 2010 would this travel be considered for calendar year 2009 or 2010? and accordingly for which block of 4 years will this travel qualify?
Thanks, Rajan.
@Rajan
As your travel ended in 2010, you can only claim for that in 2010 which will fall in block 2010-2013
Hi Pankaj,
If while going from source to destination, I travel with my wife, but while coming back from destination to source my wife comes back 3 days earlier than me, then can I reimburse for both of us or only for my ticket?
@Anurag
Yes, you may do it as she is your dependant.
Hi Pankaj,
Went through your posts here and found them very useful. Thanks
I have a question regarding international travel. I have claimed LTA last in 2006 for domestic trip. I visited my sister in London in Aug 2009. Can I claim this trip in LTA for 2009-2010 financial year. Also, I only have e-tickets but not the boarding passes. Is that sufficient?
@Deepa
First of all, LTA can not be claimed for international travel.
Secondly, e-tickets are not considered as proof, boarding pass is a must for air travel.
Dear Sir, I joined on 1-1-2009. May I claim LTA now? Further, is it required to submit the proof of travel or stay?
@Nitin
Yes, You can claim LTA now but please let me know on which date you traveled, if its before 31st Dec, 2009 then it will be counted under block of 2006-2009.
Its not required to submit travel proofs to employer as per court ruling, however some companies still insist on that.
Dear Sir, I am planned my travel on 31st Jan'10. May I will be eligible to avail LTA for 2009 ( Applicable after 1 yr as per company policy.) for exemption for A.Y.2011-12.
@Nitin,
LTA works on calender year and not on financial year. So LTA for 2009 cannot be claimed for travel in 2010.
However this will be counted in 2010 and in financial year 2009-10 (or assessment year 2010-11). You will be able to claim LTA once more in year 2011-2013.
Hi,
I made some travel in April-2008 and the have the bils.
I did not claim the LTA through my employer during 08-09.
Can I claim the LTA benefits directly while filing the income tax return for the year 2009-2010?
@Basu
You cannot claim now for Travel in 2008.
LTA is a employer's policy and generally part of package. The employer must have paid you the amount in 2008 after deducting the tax on it.
LTA can not be directly claimed in income tax return, it has to come through employer only.
Hi, I have claimed LTA in year 2007 and 2008 which completes the quota of block 2006-2009. Now, I will be travelling in Februray 2010. Can I claim this LTA amount in current financial year (i.e. 2009-10) or in next financial year (2010-11)?
@Ashish
LTA can be claimed twice in block of 4 calender years (defined by Govt.)
As these are calender year and not financial year, you may claim LTA for travel in Feb 2010 in financial year 2009-2010.
Sir
I had applied for leave from DEc 25th to Dec 31st and travelled on Dec 24th night returning back on DEc 27th. Since dec 25th was an official holiday and 26 and 27 was a weekend, in the company system, the leave period starts from DEc 28th to Dec 31st. ON this basis that I did not travel during the period that the system accepted as my leave period, my LTA claim was rejected. DO I have any legitimate claim or is my company right in rejecting my claim
@Karthik
I don't think that there is any such rule which says that you have to necessarily take leave to avail LTA.
You may claim LTA for a travel done on public holidays also.
How is the LTA amount fixed???
Regards,
valerina
@Valerina
Its part of package and decided by employer.