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,
One more clarification, what is the limit of LTA allocation out of one's gross salary as per IT rules? Is it maximum of one month's basic? If not, what is the usual norm?
@Keziah
There is no standard rule for maximum LTA amount. But generally its a standard practice of most of the employer to keep it maximum to one month's basic salary.
Pankaj,
If I avail IRCTC RAIL Packages for holidays, can the entire amount be availed for LTA?.
Also If the very next day I am touging a different place can both of them combined for LTA benefits.
Please reply
@Devendran
Only the travel fare out of this package will be non-taxable as per LTA rules.
You can take only round trip distance between two points, there should be gap in between.
Hi Pankaj,
My Querry is,i have performed journey in block 06-09, but the amount of bill is more than the eligible amount upto the end of that block.
Should the remaining balance of the invoice be carried forward & paid in the next block?
Thanks & regards
Sunil
@SunilBhatia
Remaining LTA amount cannot be carried forward to next block. Exemption for one journey can only be taken once.
Can a company define below LTA policy:
1) LTA amount will be paid only for Level/Grade 4 and above employees.
2) LTA amount will be paid to employees below Level/Grade 4 after been with the company for one year (But the company offer letter says LTA(Grade-Wise Fixed Anual Benifit)
I am a grade 2 employee, I not will to use LTA at all. But company is not paying me that amount as part of monthly salary on pro-rata basis. Company policy says G2 employee cannot not claim LTA in the first year (Means LTA will be given but after taxing that to after one year).
My question is can a company
a) Define different LTA rules based on employee grades?
b) say that LTA will not given to employee in first year of the employment?
Please give clarity on this.
@FranklinRayappa
LTA is a privilege and not a right. Company may form a policy to only include LTA in CTC for people in higher band.
This is company's policy and if you have signed detailed offer letter, you have to follow that.
Mr. Pankaj
i have a question. my father is a govt employee. is it possible for to avail LTA (or LTC) for only 1 member of the family? if so, are there any conditions on availing LTC for rest of the family mambers?
i know it was not possible few years back, but recently someone told me that it is possible now.
please reply..
@AtulSunsunwal
For claiming LTA benefit the employee must travel, there can be other family members also traveling with him/her.
In case your father has to avail LTA benefit, he must be a part of traveling group.
Hi Pankaj,
I have taken the air tickets on my wife's credit card. But we both travel together. I have all boarding passes. Also one more problem is name on the card was her previous name, surname which was there before marriage and on boarding pass her name is mentioned as name after marriage. So, can I claim LTA for this travel?
Thanks,
Kailash.
@Kailash
That should not be a worry. Boarding pass should be good for proof of travel.
Moreover, as per court orders, it not mandatory to provide proof of travel to employer for claiming LTA.
Since one has to take off from office for the period of LTA travel, can I use my CLs and Compensatory Offs(offs in lieu of working on off days) instead of my Earned Leaves? OR Is it mandatory to use ELs for claiming LTA? I wanted to save my ELs for later use or encashment.
@Sanjay
This is a company policy to provide LTA for CLs or not.
But most of the companies have policy of providing LTA only against earned leaves.
Hi! Is it possible to claim LTA for travel from delhi to Manali by taxi wherein I want to travel in a Honda CRV or a Fortuner as I have a large family and claim the exemption. The bill would be approx. Rs. 90,000/-
@Vaibhav
As per income tax rules If a recognized public transport system exists between such places, the first class or deluxe class fare of such transport by shortest route, will be taken into account, So you won't be able to claim 90,000 for this route.
Hi
Can you please advise I have lost the boarding pass fpr my travel. However I have the e-ticket for the same. Can I claim LTA for the same?
@Dasgupta
Although travel proofs are no more required to be shown to employer so you can claim LTA without proofs too, but they have to kept in case a query from Income tax department comes.
Hi Pankaj,
This may be a silly question, but i have to ask it.
i have paid for my wifes travel, twice this year, i have not travelled with her, CAn i show my bank statements and other proofs that i have paid to claim LTA, or do i have to travel also?
@Vijay
You cannot claim LTA for a trip, of which you were not a part.