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,
I have taken 15 days leave in June 11 for my marriage and went to kashmir on honeymoon with makemytrip holiday package, it is hard for me to segregate expd on air fare. How can i claim the same as LTA. also i was in AXIS till Sep and now in IDBI. How can i claim LTA ,Pls guide
@Sachin
Travel done in Jul 2011 should be claimed only with employer with which you were employed with at that time.
Current employer cannot accept claim for July 2011, if you joined them after Sept 2011.
Secondly, in case it was a total package with airfare, accommodation etc, you can show full bills to employer but max allowed exemption would be actual fare on national carrier (AirIndia). You can check flight expenses on AirIndia website and claim same.
Dear mr. Pankaj ,
please tell me, how many taxes is applicable on sale of packaged/canned software,
or sale of software in cd/pendrive, and what rate is applicable for f.y. 2011-12,
ex. i m going to sell a software in cd to our client of validity of one year and the software cost is 15000/- rs. now please tell me which tax i will charge on that service tax or vat or exise, what ? please tell me .
@Amit
This post is about leave travel allowance and its related queries.
We have knowledge only of income tax computation for a individual and don't have information about corporate/service/VAT etc taxes.
If I
1. Travel from Bangalore->Varanasi,
Stay in Varanasi for two days,
2. Travel from Varanasi->Delhi,
then stay in Delhi for 5 days, then
3. Travel from Delhi -> Bangalore.
Which all tickets can be claimed under LTA.
1, 2 & 3 OR 1 & 2 OR any other?
Thanks in advance,
Srinivas
@Srinivas
You should submit all three tickets, but max exemption amount would be either Bangalore-Delhi round trip fare or Bangalore-Varanasi round trip fare.
Hi
I travelled by Car from Bangalore-Pune-Aurangabad-Ajanta-Aurangabad-Pune
and by Air from Pune to Bangalore
Now my finance person is saying car bill is not acceptable for LTA
In that case my argument was then we should consider shortest path between Bangalore-Ajanta-Bangalore and should calculate on basis of 1st Class AC Train ticket . But finance person is saying they will consider KM travelled by Car and will apply 1st Class AC train ticket fare for calculation
But my problem is Train Route distance by KM is diffrent from Roade Route distance
which one should be consider for LTA calculation
@Parimal
You can claim exemption maximum for shortest distance fare between cities traveled (Bangalore-Ajanta here).
If a train route exists between this route, then first class AC fare for this would be considered. Economy class airfare can also be considered if a route exists.
KMs traveled by car cannot be considered here.
In best case scenario, this can be claimed: Economy class return airfare from Bangalore to Pune plus round trip public bus/train fare between Pune and Ajanta.
Hi if i made my trip by car what supporting document should i submit . ie petrol bills will do ?
@Nijil
Petrol bills cannot be treated as proof for leave travel claim. Train/Bus tickets, travel agency bills or boarding pass for air-travel would be acceptable.
I joined my current company in June 2011 so with how much amount I can claim towards LTA? Is LTA claim amount depend on my contribution in my current employer in this financial year. Or I can claim any amount subjected to LTA rules
regardless joining date
@Prajwal
Maximum LTA claim you can make would be subject to you what you have been paid by your employer as leave travel allowance.
If your package structure has 24000 as LTA for a year and you worked with them for 10 months, then company won't reimburse more than 20000 Rs for LTA claim.
hello sir
can i give taxi bills agnst my lta exp. i travel indore to ludhiana by taxi can i use this taxi bill aganst the exemption of lta
@Vikrak
Even if you submit taxi bills for LTA claim, maximum non taxable amount would be limited to fare on shortest distance traveled on public transport (train, bus, airplane)
Hi Sir,
In 2011, I have done 3-4 times travel in different month and on all those period I was on PL.
So Can I claim all travel expense or only one travel claim is acceptable?
Thanks,
Ravi C
@Ravi C
Only one travel in a calender year is acceptable for LTA claim.
what are the documents needed for claiming HBA interest deduction on loans from relatives?
@Ramakrishnan
An agreement on simple paper signed by both lender and borrower stating the amount of loan and payment terms would be sufficient.
one employee give me his traviling proof i ..he begin travelling ludhiana to haridwar.. but he gives the taxi bill from mp side. is it acceptable or not
@Vikram
Only shortest route travel fare is exempted from income tax.
Can taxi bills be an LTA proof if yes does the taxi stand needs to be some govt recognised or any private would do
My accounts team says they have to be registered pla advice ASAP thanks for hel
@Ap
As such, only public transport is allowed for LTA exemption.
But even if you submit taxi bills, only shortest distance fare on such route on public transport (bus/train/airfare) would be considered for exemption.
Taxi bills should be on proper invoice with VAT/service tax registration details of taxi provider.