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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565 Comments

  1. 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

  2. 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.

  3. 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.

  4. 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?

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  11. Is it really erquired to submit LTA bills to avail tax exemption. I read some news that SC has done an order that not required to submit bills to aviail LTA exception. but stil my employer is asking me the bills. If it is like that can u give me the supreme court order link?

  12. Hi,
    My employer is not accepting travel bills of hired taxi for LTA expemption. Would like to know if according to LTA rules, bills of hired taxi are expempted for LTA?

    What if the destination place does not have any rail or air connectivity, hence i travel by air to an intermediate destination & do a road travel by hired taxi. What are the components I can claim here? Is it both return Air fare & rented taxi fare?

    Thanks.

    • @Rahul,
      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.

  13. Hi Pankaj,
    I had travalled in March 2009 on LTA and submitted proofs to claim LTA to my employer in Jan 2010. Are they right in rejecting the LTA amount citing “Bills recieved for Last Financial Year and not current Financial year”? My assumption is that LTA is calculated for Calander year so any travel taken in 2009 ( Jan -Dec) can be claimed in FY 2009-2010 (April 09-March10). Please clarify.
    Thanks.

    • @MKG
      LTA exemption rule works on calender year and not financial year. And it can be availed 2 times in 4 years block. Last block was 2006-2009.
      Ask your employer to provide any reference to income tax rules which says that LTA from previous financial year can not be availed.

  14. Dear Pankaj,

    Need you inputs on the below queries.
    1. If I travell 2 times(more than once), Can I show both travel for LTA for the same Financial year.
    2. If I travell by Airlines,Which should be considered for LTA (Airlines fare or Shortest 1st AC train Fair)

    Thanks in advance.
    Regards
    Deepak

    • @Deepak,
      you can only claim one travel per calender year for LTA.
      If you have traveled by Airlines, max amount that can be non-taxable is economy fare of national carrier.

  15. hi..pankaj…my CTC is 3 lakh, and LTA is Rs. 12504/-, as per supreme court judjegement do i need to submit original bills to clam LTA? I have not travedlled anywhere till now…

    Pls advice…

    Thanks in advance.

    • @Chirag
      You don’t have to submit original bills to claim LTA now, but for claiming, you will have to show that you traveled on some dates along with travel amount.
      Income tax department may ask for proofs later.

  16. Can I claim tax exemption for two travels in different calendar years but same financial year?Say one travel in Sep09 and another in Jan’10 given that I have not made any other LTA claims in 2006-09 block.

  17. Hello Pankaj

    I’m a little confused here, if i do not submit the proofs how will my eomployer confirm/verify that I had travelled. Can you please explain?

    Secondly, I travelled in 2009 however since my LTA eligibility had not reached that amount so I could not submit it. Can I submit the same in 2010 when my amount elgibility is reached? Please advice.

    • @Bithika
      You can just provide your employer the reimbursement forms with travel details.
      Yes, you can submit 2009 proofs now and it will be treated as travel in 2009 only.

  18. Hi Pankaj,

    Thanks for the nice piece of information. I have two questions:
    1) Can I claim LTA benefit two times in FY2009-10 for two seperate travels made in Dec2009 and Feb2010?
    2) Can I claim LTA benefit in FY2010-2011 for a travel made in Feb2010?

    Thanks in advance for your help.

    • @Saurabh
      Yes, these travel are in two different calender years so you can claim benefit.
      and you can claim any travel in 2010 in financial year 2010.

  19. kindly suggest me that when an employee has enjoyed lta for the 15.02.2008 to 19.02.2008 through supporting & now in the current year he is enjoying from 13.2.2010 to 15.2.2010. shall the period be more or less from the previous year..

  20. Hi,
    I worked with my previous employer from July 2009-Nov 2009. My employer has paid me the LTA amount on pro-rata basis after deducting tax uptill Nov. 2009 I travelled to my home town from Mumbai (29th Sep – 3rd Oct 2009). For this, I couldn’t claim any LTA with my previous employer. Eligibility for that period of 5 months was (Rs. 19354) Now, in my present organisation for the month of Dec. 2009 LTA eligibility is Rs. 2661. Total is Rs. 22015 including the LTA amount of previous employer. Can I cliam LTA for the travel I did in 2009 with my present employer for the amount of Rs. 22015.

    My present employer pays LTA amount in the end of FY. Please help on this as present employer is not allowing to do the same.

    Similar situation I am facing in Medical bill reimbursement. My previous employer has not given me any tax deduction certificates. Please guide me.

    Thank You in advacne.

    • @Sandeep
      You cannot claim LTA of previous employer with new employer. Same with medical reimbursements.
      LTA and Medical are part of salary package and an employer can only reimburse for time for which you are their employee.

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