in Finance, Income Tax, News

No need to submit LTA proofs to employer

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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  1. 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.

  2. 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.

    Aryan Oberoi

  3. 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.

  4. 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.

  5. 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.

  6. Hi,
    Can i claim LTA tax benefit directly while filing the returns or only through employer?

    • @Sridutt
      You need to claim LTA benefit through your employer only. There is no option for LTA in income tax return form.

  7. 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.

    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

  8. 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
      Claim for travel done in 2010 should have been done before end of financial year 2010-11. It won’t be accepted now.

  9. Also if at all we have to reflect previous LTA on revised ITR… will that be ok or a concern for IT department.


  10. 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.

  11. Hi Pankaj, above its mentioned that there is no need to submit LTA proofs to employer & also the court ordered but our company are still collecting the proofs to claim LTA.
    Could you please let me know how to approach on this?

    • @Anand
      Most of the employers are still collecting proofs even after court ruling.
      Nothing much can be done here if employer insists. Only way out would be to file a case and win it like earlier ruling.

  12. how 2choose ur LTA component in your salary so as to optimize it for tax exemption/ claims. Is it max fixed % of basic or ctc or certain amount??
    For e.g.
    Basic/ month= Rs. 25,342 & gross/ month= Rs. 45,382 and
    CTC/ annum= 6,50,000

    • @Shrikant
      As such there is no specific limit on LTA component.
      But if you keep it too higher, you may not be able to make it fully non-taxable due to conditions of travel inside India on public transport. Plus this amount is non taxable only twice in four years.

      • hi pankaj,
        1. can LTA be claimed with 2 diff employers in 2 consecutive years e.g. 1st (2011-12) & 2nd (2012-13)?
        2. can LTA of 1st employer be claimed with the 2nd employer in the subsequent year?

        • @Shrikant
          1. Yes, LTA can be claimed in two consecutive years, even with two different employers.
          2. LTA amount of an employer cannot be claimed with any other employer.

  13. How Many Leave’s does an employee need to take to claim LTA

    • @Vernica
      It depends on company policy. There is no standard rule/act for minimum leaves to be taken. Generally its two earned leaves.

  14. Dear Sir,
    I am working in Pune. I travelled wth my wife in tourism bus from Vadodara to JammuKashmir and back, and got the proper bill of 25000 Rs.
    My LTA entitlement is 50000 Rs, I submitted these bills to the company and they have , allowed LTA exemption of some around 13000 Rs only , by mentioning the reason as “As per LTA rule , LTA amount is considered as 1st Class AC train fare”
    Could you please mention if this is valid as mentioned by Payroll team of my company ? because I have seen people producing fake bills of travelling by Cab from Pune to Assam, and producing that bill and it got approved in their company..

    In my case, I have genuinely travelled, still the bills got rejected with above reason, please help me if above rules are true then I can question back to company

    Waiting your reply 22nd is the last date to get clarifications,


    • @Joy
      Your employer is right in providing only limited amount as non taxable. This is as per income tax rules.
      Please note that bills are not rejected but non taxable amount has been limited. You would get remaining 37000 rs as taxable.

      As per income tax rules, following amount would be non-taxable:
      1. Where journey is performed by rail; railway fare in first AC class by shortest route to destination.
      2. Where places of origin and destination are connected by rail but the journey is performed by any other mode then first AC class fare by shortest route to the place of destination.
      3. Where place of origin of journey and destination, or part thereof, are not connected by rail and journey is performed by any other transport; then (i) If a recognised public transport system exists between such places the first class or deluxe class fare of such transport by shortest route, or, (ii) If in other case, first AC class fare for the distance of the journey by the shortest route, as if the journey has been performed by rail.

  15. hi
    my annual salary is below 1,70,000 .i wont come under any taxable criteria .wheather i can claim LTA Of Rs 18000 without submission of bill ? can any one suggest me

    • @Vinod
      If your package structure has component for LTA and your employer clears the amount at financial year end even without claim (if applicable after tax deduction), then you should be able to get this amount.

  16. Mr Batra,

    I need a quick help!!

    I have claimed for the LTA exemption and provided the taxi voucher to the company, I am OK with the calculation as per IT norms, like, Calculation based on the public transport like 1st class A/c train/Bus fare.

    But what is asked by company is to provide the hotel bills as proof of travel. Now the issue is I didn’t collect the hotel bills as I knew that I couldn’t claim for that in LTA. and With bill stay is costlier.

    PLease guide me if providing these hotel bills / toll-tax is necessary for the LTA claim.

    My previous company this worked well without providing any hotel bills.

    Thanks in advance,

    • @NKMemon
      As such hotel bills are not required for LTA claim, but employer may be asking it to prove authenticity of your travel.
      Some employees submit fake taxi bills as they are easier to get made, employer need some additional evidence to prove that employee has actually traveled to that destination.
      To convince them, some other local bills like eating out in a restaurant, tickets for some museum/temple visited there etc would be sufficient.

      As LTA is employer provided benefit, its important to convince employer that you actually traveled.

  17. Hello Pankaj,

    Is there any maximum cap for claiming LTA benifit.
    Like if my CTC is 5 lack and I am claiming LTA benifit of 3 lack.. is it possible??

    • @Vicky
      LTA should be a component in your CTC for your employer to process same.
      if you can get your CTC structured such that out of 5 lakh CTC, you have 3 lakh LTA then you can very well claim that as non-taxable in case you (along with family and dependents) actually traveled and spent such huge amount on travelling in India.

  18. Dear Batraji,

    My question is, If an individual has drawn the LTA claim from the company in financial year 2010-11 but did not undertaken the journey in that financial year. But he has undertaken the Journey in 2011-12. Can he claim Exemption in 2011-12 for the LTA amount received in 2010-11. IF yes, then How, because in form 12BA the employer have to show the negative figure for LTA exemption. Kindly through some light over this issue.

    thanks in advance

    with Regards


    • @Nipin
      Travel and exemption should be in same year.
      Your company may already have deducted taxes on LTA payment done in 2010-11 as you did not traveled in that year.
      Travel done in 2011-12 would be a different claim now and cannot be adjusted against payment made before travel.

      • But in Sec 10(5) only says that ” The exemption can be availed only in respect of two journeys performed in a block of four calendar years.” It does not says that the exemption should be claimed in the same financial year. Please clarify

        • @Nipin
          Rule says maximum two journeys can be claimed for exemption in a block period of four years.
          One cannot first claim LTA exemption and travel afterwords. No employer would also pass a non taxable claim for travel to be done in future or which was done in previous years.

  19. Hello Mr. Batra,

    I claimed LTA in 2010 for the travel done in 2009. So will this claim fall under the block of 2006-2009 or under 2010-2013. Is the based on the claim date or on the travel date. Please clarify.

    Siva A N

  20. Sir, I have a Query.

    In my organisaton, we pay LTA amount to the associates every month. Eg i an employees CTC is 1,000,000 I set the CTC some thing like
    Monthly Annually
    Basic 41,667 500,000
    HRA 16,667 200,000
    LTA 3,472 41,667
    CA 800 9,600
    Edu All 200 2,400
    Medical Reimb 1,250 15,000
    Fuel reimb 6,667 80,000
    Meal All 3,000 36,000
    Special 4,111 49,333
    PF 5,000 60,000
    CTC 83,333 1,000,000

    In this above case we pay the LTA component of 3472 every month, in March 2012, the associates realised he has traveled and wants to claim LTA of 41,667, Wont the assocaite get the benift of TAx exemption in the salary that is paid in March.

    And assume associate is not claimed LTA in 2010, 2011 and wants to claim in 2012, wont it be like for 2010, 2011 it was a taxable amount and 2012 and 2013 it will be a non taxable aont.

    What do you suggest LTA be paid annually or half yearly or is it jus find to pay every month.

    • @Vernica
      In case an associate claims LTA benefits, his LTA component would become partially or fully non-taxable (depending on non-taxable amount as per Govt rules).

      If associate has not claimed LTA in 2010, 2011 and amount had already been paid, this amount won’t become non-taxable for 2012 claim.

      This solely depends on company policy whether to pay LTA component monthly, yearly or only on claim (carry forward). Employees generally would be happy to receive it monthly as it would increase their in hand salary.

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