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. Hello Pankaj,

    a) Does LTA cover lodging/boarding expenses also ?
    b) I travelled from Ahmedabad to Calicut via Mumbai. Is the route ok for LTA calculations ?
    c) From calicut I had been to a resort around 2hrs drive. I had booked a taxi to and fro. Can I claim the taxi expenses also (even if I dont have bills) ?

    Thanks in anticipation.

    Regards,
    Himanshu

    • @Himanshu
      1. No, LTA does not cover lodging/boarding expenses.
      2. For LTA exemption, shortest distance is counted.
      3. In case a public transport (bus/train) exists between calicut and resort, only fare on that public transport is exempted.

  2. Hi,

    I worked in one company till Oct,2010 and joined another in Nov, 2010. After leaving the first company and before joining the second company I travelled to Delhi with My family and back..Now my prev company cannot give me LTA exemption since I had left the company by then and the new company is also not giving the exemption as the travel was done before I joined them…

    Can I claim, this journey in LTA ?

    • @Rohit
      As travel was done outside the employment period of any employer, they won’t accept the claim and nothing more can be done in this case.

  3. Hi Pankaj, I have a query. I traveled between Bangalore and Delhi. [To: 05-Feb-2011 Return: 22-Feb-2011]. As per the rule I must have applied leaves for that period. My Q is what if I apply leaves only for 7th Feb and 22nd Feb. The rule asks for 2 Days leave only. In my case I was working from Home for the remaining days. I went to Delhi to see my parents. Will my LTA application get approved with only those 2 days leave applied? Thanks in Advance!!

    • @Ajay
      For LTA claim, you must have return tickets from Bangalore to Delhi and for same days, you must be on leave from company (you can exclude weekends when office is closed).

      • Is there a rule which says that more than 2 days leave needs to be taken for claiming LTA? I had travelled from Bangalore to Delhi on a Saturday and taken leave on Monday. So with only one day’s leave I was able to finish my journey. Is it not possible to claim this travel amount?

        • @Saurav
          Most of the companies have this rule and you will have to abide by that. Generally you have to take 2 days earned leaves (ELs) to claim LTA.

  4. Dear Sir,
    my salary Rs.216000/- and other income Rs. 150000/- pl advice deduction from salary
    Please advice profit % on trading

  5. Hi Pankaj,

    My journey is as follows…

    7th Sep | Bangalore – Delhi | 2365 Km
    7th Sep: Delhi – Lucknow | 511 Km
    Single Airticket for both: 13518
    __________________________________
    16th Sep | Lucknow Mumbai | 1137 Km | Rs. 8662
    22th Sep | Mumbai – Bangalore | 1426 Km | Rs. 9383

    From Bangalore to Lucknow | 2876 Km | Rs. 13518
    From Lucknow to bangalore | 2563 Km | Rs. 18045

    My question is, from Bang to Lucknow distance is more but fare is less, while its opposite in the return journey. Now the LTA calculation is based on the actual fare, or based on the less distance or less fare.

      • Hi Pankaj,

        Sorry to bother you again. It’s not being clear to me. There’re no flight direct flights from AirIndia or any other airlines. The flights are only via Delhi or Mumbai. The shortest distance is Via Mumbai (the diff is only 150 Km), but my fare is less via Delhi. Also how to basebase the fares from AirIndia as in Air Industry the prices vary too much based on the date and time and how much before you go for the tickets.

        • @Feeroz
          There is no direct flight between Bangalore and Lucknow, so whatever is the cheapest flight available on Air-India for that route, fare for that will be considered maximum.
          If your spend is less than that, it will be considered fully.

  6. Hi Pankaj,
    According to your post above, Employer is not required to collect LTA proof, who will collect the proof in that case (You mentioned in one of the replies that LTA is employer provided exemption, how will they know we travelled).

    This means Employee can claim entire amount of LTA without even travelling (just by taking a 5 days leave). is it right?

    Please let us know how we can correctly claim LTA after the above.

    Thanks

    • @Karmendra
      You have to provide a signed reimbursement sheet with travel details (places, date, expense and mode of transport).
      As it will be signed by you, it will act as a legal statement.

  7. Hi,
    I am working in Bangalore and my family is in Pune. is it really necessary to start my travel from Bangalore as i am working here to claim LTA ?
    or can i claim for any travel across India ? like starting from Pune to Shimla and back.

    Thanks
    Girish

    • @Girish
      Yes, you can claim Pune to Shimla and back for LTA.
      There is no as such requirement to start and end journey in office location.

      • Thanks Pankaj,

        Does it documented in income tax LTA guidelines, as my office payroll team is not accepting that saying that my start and end location should be blore as i am working here.

        Thanks

        • @Girish
          There is no such mention in income tax rules that says start and end location should be same as working location.

          • Yes checked that its written in Income tax book but they are not agree on that.
            can you please suggest what to do ?

            Thanks
            Girish

              • 🙁
                they are also showing the same thing to me from IT book, but he is not ready to accept travel bills for other location.

  8. Dear Pankaj

    I joined my present company 6 months back. I now wish to go on leave and draw my LTA for the purpose. I am being told that I cannot be granted LTA before the end of the year i.e.December 2011. My query is regarding the concept of granting LTA (and not tax exemption on the LTA). Is it compulsory by law that I wait to complete the year before I can go on leave- to claim my Leave travel allowance?
    Thank you.

    • @Bhartendu
      This is employer specific policy and not by income tax laws.
      You can submit your claim with same documents in Dec 2011, when one year will gets completed.

  9. Dear Pankaj,
    I have an LTA refund of Rs2000 for a financial year. I live in Chennai and would be travelling to Bangalore by Bus next week. I am leaving on Fri night and wud be returning on Tue morning. I am working on Fri and takin off on Mon. Will my up & down ticket fare of Rs 600 would be considered for calculation though am not off on Fri. Please clarify since am confused. Thanks a Ton.

    • @Siddharth
      Your bus tickets should be considered for LTA claim.
      Regarding leaves, its an employer policy. Please consult your employer regarding this.

  10. Hi Pankaj,

    Are bus tickets and taxi bills valid to claim for LTA?

    • Only bus/rail/air tickets are valid for LTA claim and travel should be within
      india.

  11. Hi Pankaj,
    I have not taken LTA from the past three years from My employer. In our company gives LTA every 2 years. My questions here is :
    1. What is the time limit to avail LTA?
    2. Can I take just before leaving company?

    • @Suresh
      Income tax exemption on LTA can be availed twice in block of four years. Currently 2010-13 block is in progress.
      There is no time limit to claim LTA exemption. You can avail it before leaving company too but your employer must approve your leaves for the same.

  12. Hi, I had declared INR20k as LTA in my income tax declaration however while claiming it from my company (Pvt ltd, MNC) they refused to take my Taxi hire bill with the trip sheet stating they would need a secondary proof like ATM/CC transaction done at the travel place, lodgin bill, any purchase bill for me to claim the LTA. I am aware these secondary proof is not required however my company did not process the claim. Now i have the bill, can i produce it while filing my IT returns along with my form 16, to get a tax refund from the government. I have lsot around Rs5k as tax due to this.Please advise.

    • @Huzefa
      Generally taxi fare bills are not accepted for LTA claim. In order to make your claim valid, they are asking any other proof of travel.
      You cannot claim same now in income tax return and nothing more can be done in this case.
      Only thing you can do is convince your employer and get it corrected in Form-16, i.e. get it removed from taxable component.

  13. Hi.. I have taken the air ticket through internet (eticket and not original ticket) and i will provide the boarding pass to the company as a proof… will that be enough as i am not providing oriignal ticket (booked through interent) ?

    • @Ashish
      Boarding pass is enough for showing travel proof. You should be able to claim LTA with boarding pass and e-ticket copy.

  14. Hi Pankaj,

    I travelled the following way:

    5th March – Bangalore to Kolkata – with Family – By Jet Airways (cost ~20000)
    9th March to 12th April I was working remotely
    13th April – Kolkata to Bangalore – with family – By Jet Airways (cost ~20000)

    Note: There is a gap of 1 month between complete round journey.

    Can I claim whole 40000 from LTA (both side journey)?

    Regards,

    Prasad

    • @Prasad
      Your return trip won’t be accepted for LTA claim. As it can’t be considered as leave travel because you were not on leaves in between.

  15. Hi,

    I travelled From Hyderabad to Delhi by Air and From Delhi I went to Manali by Road. Can I claim LTA for both. The mode of transport changed in Between

    • @Kalyan
      As there is no flight between Hyderabad and Manali, part air travel and part road travel can be claimed.
      But there should not be a gap in between (in Delhi).
      And only fare on public transport (bus/train) will be considered for exemption on Delhi-Manali route.

  16. Hi Panjak,
    I changed my job in Nov2010, My pervious company did my final settlement and TAXED my LTA, but in Jan2011 I travelled and claimed my LTA from new company.
    so they they are giving me tax benefit only on amount for which i was in there employment. Can i claim Full refund while filing returns? how it do it?

    • @Avinash
      LTA is a employer provided benefit and once you leave an employer, that amount cannot be claimed for tax exemption.
      New employer can only approve claim from their portion.
      You may try claiming the same while income tax return filing but there are high chances that tax officer will raise a query and ask for explanation of refund.
      To do that, just reduce your taxable salary by non-taxable LTA amount.

  17. Hi Pankaj,

    I recently joined an MNC and my CTC is Rs 295000/- being a women how much amount is taxable in my case.

    I am living in a rented house and the rent is around 50000/- per annum and I am spending around 45000/- per annum for my child’s education are these sufficent or i still need some more to escame any taxes.

    Regards

    Pallavi

  18. Hi Pankaj,

    here r my compensation break up

    Basic 85260
    hra 34104
    conveyance allowance 9600Medical 15000
    Lta 10658
    Special allowance 78747
    Companys contribution to PF 10231
    Variable pay 28000
    Statutory Bonus (in advance) 8400
    Gratuity 4242
    Insurance 9944

    Total CTC 294186

    Regards

    Pallavi

  19. My employer is saying that we need to be on leave for at least 5 working days if we want to apply for LTA. I cannot find this rule any where. Is there a such rule where we have to a minimum number of paid leaves to be eligible for LTA

    • @Sumit
      There is no as such standard/official rule for minimum number of leaves required to claiming LTA.
      Every company has its own policies enforced. In my previous employer, it was just 2 earned leaves.

  20. I am travelling from Delhi to Dalhousie via cab (road). Can I claim taxi bills for LTA? There is no direct train from Delhi to Dalhousie (Himachal) but there is train from Delhi to Pathankot and from there bus is available as a public transport.

    • @Lokesh
      As per Govt rules, Maximum amount which will be non-taxable, will be Delhi Pathankot Train fare + Bus fare from Pathankot to Dalhousie.

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