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
Hi Pankaj,
Great information! Thanks for sharing such details. However I am still unclear on this latest ruling from Supreme court of India. My confusion is that If I want tax benefit then also I do not need to produce the proofs OR this is only when I want to claim the LTA as taxable income. As I understand we already need not to provide any proofs for later (not Tax benefits) case but none of site clearly says that we do not need to provide proof even when we want Tax Benefit
@Pradeep
Even if you want tax benefit, there is no need to provide proof to employer.
i get 15000 as my LTA but the company says that without proof then treat as taxable income. what should i do?
@Puneet
If you have not traveled anywhere then LTA will be taxable only.
Hello All, My LTA is 9000 as per my CTC. which I get 750 per month in my each month salary. My HR says that, you can not claim this amount for income tax relief.
Please tell me is there any rule like this in India.
Please send at my email too.
Thanks a lot.
@Atul
If your CTC has LTA component, then you should be able to claim income tax benefit for the same, otherwise there is no point of keeping LTA portion in salary.
There is no such rule which should stop you for claiming exemption.
Please ask your HR for a valid and detailed reason on why you cannot claim this amount.
Hello Pankaj, Many thanks for your kind reply. Is paying monthly LTA is right ? or any rule which says when company gives monthly LTA even then I can apply for tax exemption?
Thnaks in advance 🙂 Atul Mandal
@Atul
Yes, some companies pays LTA per month.
You can apply for tax exemption in monthly paid LTA too.
At the end of year, if LTA claim is made and exemption is available (2 times in block of 4 years) then no tax is deducted on the LTA amount (subject to minimum of amount of claim made and actual LTA in package).
But if LTA is not claimed, whole LTA amount paid in the year will become taxable and tax will be deducted.
Hi Pankaj,
Can I claim LTA with orginal bills if I travel on different date’s against the travel dates of my dependends. Is it nessasary that I travel with my dependends on the same day.
@Binu
Yes, dependents must accompany you in travel (same start/end date and mode), in case you want to claim deduction for them also.
It means, I have to show the proof of travel to my employer, but my employer will not collect the proof from me….. am I right?
one more query… can I submit taxt bill? as I went on vacation with my parents by acquiring 1 taxi on rent.
@Bharat
Yes, employer does not have right to collect travel proof from you.
Taxi bills generally are not acceptable. Even if they are accepted, only shortest distance route fare will be considered through public transport (1st class train AC or economy class airfare). E.g. if you traveled between Mumbai and Pune through Taxi, max exemption will be 1st class AC train fare between these cities, no matter what you paid for taxi.
Hi Pankaj,
Can you please tell me if i will go on a trip with my parents first from Delhi-madurai by air then from madurai to rameshwaram via train and will be taking the same route while coming back to delhi , can i claim the amount from my employer as LTA and will get the tax benefit for the same … also i stay in bangalore so if i add on my travel to delhi in this as well i.e. i will go to delhi from bangalore and then we all will move towards rameshwaram as mentioned above and i will be coming back to bangalore after all this , kindly suggest ..
Thanks in Advance ..
@Kapil
If there is no break in between (they are on same date or next day in case of night flight), both air and train claims can be done.
But as shortest distance is measured between cities, you cannot claim Bangalore-Delhi-Madurai-Rameshwaram.
thanks a lot Pankaj u r really doing a very nice job .. 🙂
Hi Pankaj
Thanks for the above info. I just want to ask you that I have to apply for LTA, and I am providing the air tickets for the same. but my finance guys also asks for boarding pass with that, which I have misplaced. So is it necessary to submit the boarding pass too. can’t I avail LTA without it?Also is the toll tickets necessary with the cab bills?
@Saurabh
Boarding pass is required in case of travel is done by air.
As per court rules, LTA proofs are not required to be submitted to employer. But still many employers are still taking the safer route and asking for proofs.
Hi Saurabh,
You can contact the airline and get the boarding pass/proof of travel. I had taken previously form Kingfisher, I am not sure about other airlines.
Hi,
I got the LTA benefit in 2010 march for the travel in 2009. Before that I had not got any LTA exemption ever. Now can I get the LTA benefit this financial year 2011 march for the travel which I did in the feb -march 2010. Some body told me yes I can get this year again as the new block of LTA year starts from 2011. Please help.
@Javed
Yes, as per Govt rules, LTA works on calender year and not financial year. You should be able to get LTA claim for travel done in 2011, as last travel was claimed in 2010.
Some of the employer for ease of accounting, align LTA with financial year, which is technically not correct.
hi, agr mere paas koi lta proof nahi hai, lekin muje lta mila hai 49800 to kya wo pura less hoga
@Savita
If you have not traveled or does not any proof for the same, whole LTA amount received will be added to your taxable income and taxed as per your income tax slab rate.
hi, thanks for my reply but u can tell me , ager muje lta mila hai rs. 75824 or mere pass proof hai rs 62860/- ka to kay75824-62860=12964 to maine lta amont se proof amt less ki to jitna amt bacha e.g ya pe 12964/- itna bacha hai to kya eske uper tax lagega . to kya ye amt taxable amt me jayegi. pls. reply i am wating
@Savita
If you have claimed LTA for amount less that what your CTC has, then remaining amount will be taxable.
Here in your case, 12964 will be added to your taxable income and will be taxed. Rest 62860 will be non-taxable.
http://www.pankajbatra.com/ hi, es web site se maine income tax calulater download kiya hai, lekin some time esme koi wrong ans ate hai jaise ki e.g mr ramesh total sal income Salary Income 845125
Less Medical Allowance 15000
Less Transport Allowance 9600
Less LTA 49800 (LTA ka koi proof nahi hai)
Bal. 770725
Less Professional Tax 3000
Bal. 767725
Less Home loan interst 150000
Bal. 617725
Less 80 C 100000
Less 80 D 5280
Bal. 512445
512450 rounding
Less Tax Free 160000
taxseable amt 352450
10% 35245
3% 1057
36302 This is final tax amt as per my calculation
BUT apke calculator me na jane q rounding amt tak correct hai lekin uske baad jo tax amt 10% ata hai wo amt 36490/- batata hai. so pls. reply me aisa q ho raha hai.
@Savita
There is a mistake you are doing in income tax calculations.
Whole amount of 512450 is taxable salary and 160000 cannot be deducted from it.
As per income tax slabs, there is zero tax on first 1,60,000. For next 3,40,000 (5 lakhs – 1.6 lakhs), there is a tax of 10%. For next 3 lakhs (8 lakhs – 5 lakhs) there is 20% income tax and then all amount above that is taxable at 30%.
Taxable income = 512450
Income tax = 160000*0% + 340000*10% + 12450*20% = 0+34000+2490 = 36490
Further 3% education cess will also be added to it.
thanksn sir
I have joined my present company in Nov’2010 . Company says I cannot accumulate my LTA claim for 2010-11 and will have submit the travel bills or else the income would be offered to tax . I am still on probation and not a confirmed employee and hence cannot take any leave to travel and make my LTA tax free. Can I carry forward my LTA amount of 2010-11 and claim the same in 2011-12 alongwith the LTA amount of 2011-12.
@Ajit
You can talk to your employer if they can defer your LTA payment in 2010-11 and pay the same along with 2011-12 payment in LTA claim.
It solely will depend on your employer’s take on it. There is no official carry forward rule of LTA, by which yearly allowance can be added to next year.
Hiiiiii
2 times in period of 4 years means…??? any two financial year
(i mean multiple travel in single year) or only two trip travelling???
Can i claim LTA exemption for any two financial year out of this four year block??
suppose i have travelled two times (for example in June and in Dec 2010) in one financial year, then will this be considered as one time claim or two time claim??
@Bhavin
You can only claim income tax deduction twice for travel done in a block of four years. Also it only be claimed once in a calender year.
Block of four years has been fixed by Govt. Current block is Jan 2010-Dec 2013.
So you can claim any two travels done between Jan 2010 and Dec 2013, but these two should not fall in same calender year.
Hi, I am in banglore. I rome through the kerala with some package tour. this package include all (Private Transportation , air ticket , hotel stay,etc…) Now When I claim under my LTA. They did not consider this as LTA. They say package tour will not consider for LTA. If I submit the bording pass of air ticket only that part will be consider as LTA. One of my relative travel same way as I travel and the got this under LTA.
Please let me know can I claim this is as my LTA or not?
Thanks in Adv.
@GKP
Leave travel allowance is exempt from income tax within certain limits as under : –
(a) Where journey is performed by rail; railway-fare in Second AC class by shortest route to destination.
(b) Where places of origin and destination are connected by rail but the journey is performed by any other mode then Second AC class fare by shortest route to the place of destination.
(c) 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 recognized 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, Second AC class fare for the distance of the journey by the shortest route, as if the journey has been performed by rail.
So, your employer is right in considering only the air ticket part of travel.
Not sure, how your relative’s employer considered whole amount. He may run into issue in case of scrutiny from income tax department.
Hi Pankaj,
Thanks for the reply. My relatives is bank employee. I believe we have diff rules in govt bank and private ogr. like we have LTA and govt and bank employee have LTC. This is reason why they got that. Please let me know is this correct?
Thanks,
Gautam
@GKP
Leave Travel Allowance(LTA) is a part of Cost to Company(CTC). Even if one don’t claim will get this amount after tax deduction. Most of the private organizations offer LTA. Whereas LTC is over and above CTC. If one travels, he/she will get payment for the same amount. If one does not travel, he/she gets nothing. LTC is generally provided in Govt and public sector organizations.
But both of these components only provide exemption for travel done and not for hotels and other charges.
can i claim taxi bill in LTA
@Sandeep
Yes, you can.But maximum exemption you will get is public transport fare (train/bus/airfare) between cities traveled.
Hi Pankaj,
Is it necessary to take 5 days leave to apply for LTA?
@NiravB
It depends on company policy. Some employer have policy of minimum 3 days, some don’t even have such minimum days policy.
Dear Pankaj,
If i go along with my wife to sone destination and my dependent parents wish to go to another destination during the same time period, will I be able to get LTA and tax exemption on the same?
@Pankaj
For LTA claim, you must travel along with dependents in the same journey.
Hello Pankaj,
I am Haryana Government employee and got 35000 as LTC. I have taken leave for 4 days for LTC. I have performed the whole four days journeying in my own car. I stayed at relatives residences on the way. In toto I don’t have any proof of my stay in hotels and any travel tickets. Now my questions are:
1. Can I claim tax exemption for whole 35000?
2. What proofs will I have to submit to my DDO for tax exemption?
Thanks and regards.
Vedpal Yadav
@Vedpal
You will have to provide some evidence of journey performed. Bills from any taxi tour company will also help.
But there are low chances that whole 35000 is considered for tax exemption, because as per Govt rules, only public transport fare will be considered at max.
If travel places are connected by public transport like air, train or bus, then fare of any of these for shortest route will be considered.
Does the taxi bill should necessarily have BST/CST/Sales Tax Number on it?
@Roshan
Yes, this is in order to avoid any fake receipts.
Hello Pankaj,
how much amount would be deducted as tax from my LTA of Rs. 65000 p.a.
Regards,
Kavita
@Kavita
In case you don’t claim exemption for travel done, LTA will become taxable and will be taxed as per your income tax slab rate (which may go upto max 30%).
HI, I travelled by air with my family but I have 2 tickets . In one ticket is for me/husband/son and other seoarate ticket with same airlines/same date of my parents . Can I claim for both tickets or only those in which my name is included.
Please reply
@Anu
For Air travel, boarding pass is needed as a proof.
You may travel along with your dependents to claim exemptions, but all must travel together on same date and flight. You will have to show boarding pass for all travelers of same flight.
Dear Pankaj,
Please let me know how to Claim Income Tax relief under section 89 (i).
Regards,
Sudip
@Sudip
You can compute tax exemption and fill Form 10E in order to claim exemption.
Form 10E can be downloaded from http://www.incometaxindia.gov.in/forms/10e.pdf