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
Pankaj,
One more question regarding LTA – I traveled to Kathmandu for Thursday – Sunday through Spice Jet and within these days I again took additional flight of mountain view. Please suggest if this Journey – Delhi -> Kathmandu (another domestic flight within Kathmandu) -> Delhi will be eligible for LTA? If Yes, can it also include the lodging charges since it was a package deal.
Let me know!
@Varun
As per income tax rules, LTA exemption is only available for travel done within India. Tour to any other country won’t be considered.
hiiii Pankaj,
I had a query regarding LTA. 1 of my employee is claiming an LTA of RS. 45000/- in 2 years. The actual LTA in his CTC is 25000 p.a.
He his also providing the proof of his travel ( which is not pertaining to travel expense incurred in India i.e. relating to foriegn travel ).
So,
1. Shall i pay him that amt ?
2. On what amount should i deduct the Tax ?
@Gaurav
1. LTA exemption is not allowed for travel done outside India.
2. Its your company’s decision whether to pay two year’s LTA mount together. Generally companies clear accounts by 31st March every year and if someone has not claimed LTA, he is paid amount after deducting taxes, hence there is no carry forward of amount.
@ Mr. Pankaj,
If one want to claim LTA, once in a two year slab (2011-2012) and wish to travles in both the CY 2011 & 2012 to makeup for the total LTA amount , can he combine the two travel bills and cliam LTA at the end of CY 12 to get IT exemption? Or only latest year LTA bill is valid? Request you to clarify on this. Thanks!
@Ravindra
Expenses from two different travels cannot be combined for LTA exemption. At one time only a single travel has to be claimed.
Thank you Sir!
SIR
I AM regular employee i did not take lta from my company from last four year can i get
the same with out travel leave. And now i am going to my home for 6 days so can i take the LTA.
@Wahid
You can claim LTA exemption if your salary structure have component for same.
Any travel in India can be claimed for same.
dear mr batra i pay 2600 to our employee as a LTA then at the time of deducting tds could i get exemption from 2600*12=31200 or not?
@Amit
If you have traveled in India on holiday trips with/without your family, you can claim tax benefit for LTA portion twice in a block of four years.
could any one please help me
here is a salary detail of an employee
basic 14000
hra 7000
LTA 2800
medical 1250
transportation 800
internet excess allowance 800
telephone calls allowance 500
special performance payout monthly 2400
professional enrichment allowance 450
gross salary is 30000/- per month
please tell me how would i compute tax liability for f.y.11-12(a.y. 12-13)
and do we get exemption on HRA,Medical , transportation, and any other allowance?
tell me in detail please…….
@Amit
You can download and use income tax calculator on this page: http://www.pankajbatra.com/india/income-tax-calculator-india-2010-2011-2012/
Hi Pankaj,
Hope all is well at your end. I wanted to understand this from the perespective of VPF. Is there any administration charges 1.10% that are to be borne by the employee in VPF?
Your advice will be appreciated.
Warm Regards,
Lakshay
@Lakshay
I am not sure if VPF attracts administration charges.
Please consult your employer for same.
Hi Pankaj,
I understand that my question does not pertain to the subject of the discussion here. However, i will be grateful if you can please help me out with the query.
Hope to hear from you.
Warm Regards,
Lakshay
Hi Pankaj,
During Oct 11 I had travelled from Nashik to Nagpur approx. 1500 km to and fro, by my car. in 6 days. I have fuel bills worth approx. 7000/- How much LTA rebate can I claim / which IT rule is applied to this ?
@Mangesh
Maximum LTA exemption which can be availed is fare on public transport (bus, train or airline) on shortest distance between cities.
No matter how much you have spent, max benefit you can take is this only.
Also, petrol bills with your own car are not a valid proof of travel. Bus/Train/Air tickets would be considered in case public transport exists, else travel bill from a taxi agency would be needed.
Hi Can we need to Submit LTA Proofs to avail tax exemption, My Employer insisting me to provide Proofs Please clarify. thanks
@Babu Kanigiri
As per court ruling employer has no right to collect proofs for travel, but still some employer insist for same.
Hi Pankaj,
I travelled to Andaman Islands in January 2011. But in July 2011, I switched to another company. My question is that can I avail LTA exemption at this point of time through existing company. I have e-ticket and boarding passes with me.
Moreover, please let me know, let say for example if we are going to Jaipur by train and hire a cab there to roam in and aroun Jaipur and comes back by train to hometown. Can I claim LTA against train ticket and taxi bill.
thanks and Regards,
Mohit
@Mohit
Existing company cannot provide LTA benefit for a time period in which you were not employed with them.
You won’t be able to claim for taxi bills for site seeing. LTA would only be applicable for connection between two cities. Train ticket to and from Jaipur would be considered for LTA claim.
hI ,
i Worked in TCS FOR 4 YRS(June 2007 June 2011).I never claimed for LTA.Currently working in CGI. this febraury planning for a trip with family.
where can i apply the LTA bills. Is there any chance of getting the tax benefit
(if amount is more than than i can claim in CGI)
@Rajesh
If your salary structure in current company has LTA component, you can claim for same. Company would pay you max only that amount which is there in your annual CTC.
You need to provide a claim form to your employer. Max amount non taxable in claim would be shortest distance fare on places visited on public transport like train, bus or airline fare.
Hi Pankaj,
Nice to see your comments on LTA exemption rules, i have few queries regarding same.
Since 7 yrs of my carrer i never claimed for LTA, now the LTA period 2010- 2014, in this period also i have not claimed for LTA, now my questions are as follows:
1. Can i cliam the amount which i have travelled in 2010 May during my marriege
as a LTA for the financial year 2011-2012 (i have changed my company in the
month of Sept 2011) ?
2. How do i carry farward my LTA from 2011-2012 to 2012-2013 ?
3. Can i claim the 2011 travels bills in Financial year 2011-2012 ?
4. Can i claim the 2012 Jan travel bills in financial year 2012-2013 ?
Please do the needful.
Regards,
Rekha
@Rekha
1. As you have changed the employer, so you cannot claim for travel done before joining current employer with current one. If you wanted to claim, you should have done it with earlier employer.
2. Current block of LTA is Jan 2010-Dec 2013, you can claim twice now before Dec 2013.
3. Yes, you can claim travel bills from 2011 in FY 2011-12. But travel period should lie within period of employment with current employer.
4. As LTA rules are based on calender year, you should be able to claim Jan 2012 bills in FY 2012-13. But most of the companies try to align it with financial year and may not accept same.
Thanks a ton for your prompt reply.
I have one more query:
I am not having suffient amount of Travel Expenses to claim for full amount of LTA for this financial year (2011- 2012), so i wanted to carryfarward the remaining amount to next calender year or financial year will it be possible ? If Yes, please provide me the process for it.
Ex: If am eligible for 20K LTA and i have a actual expenses are 15K, so the remaining amount will be 5k, can i carryforward for next financial year this remianing amount as the next financial year falls under current block.
Thank you once again.
Rekha
@Rekha
If LTA is a part of your package structure (CTC), then generally employer pay the amount after deducting taxes if claim is not made.
So lets say, you have 20,000 as LTA amount in CTC and you claim only for Rs 25,000 then company will pay you 35,000 as non taxable and 5,000 as taxable income.
Few companies may carry forward unclaimed LTA amount to next year and pay bigger amount at once next year. For this, you would need to ask your employer.
hi.pankaj please tell me , i receive 2800 per month as LTA from employer
and from this month my employer is going to deduct tds on salary,so could i claim for exemption of LTA at the time of TDS decuction? if yes then i have to to produce the LTA proof to employer or not?
pls tell me as soon as possible ..thanks.
.
@Amit Jha
If you won’t submit LTA claim till prescribed time with your employer, they will deduct TDS on whole amount.
As per supreme court judgement employer have no right to collect LTA proofs, but most of the employer still collect that.
Ideally a simple LTA reimbursement claim with detail of travel (place traveled, air/bus/train fare amount) should be enough.
hi pankaj,
pl let me know abt the driver salary…is it non taxable…and if yes till wot limit…..
thanks
ruchi
@Ruchi
If your salary structure has component for same, you can claim for same by showing driver salary receipts with your employer.
Max non taxable amount per month is Rs 900.
i have took lot of leave ( example more than 30 days continously)
can i claim LTA
@Murthy
If your package structure has LTA component, you have actual traveled in India for a trip and you have not already claimed for LTA twice after Jan 2010, then you can claim for LTA exemption by submitting claim forms to your employer.
Please let me know if i can claim the LTA without submitting the Boarding pass of flights which i boarded last year.
@Payal
Officially there is no need to submit proofs to employer, but income tax department may ask for proofs when needed. In case you don’t have proofs, its not advisable to claim same.
Pankaj, is there a rule which says that the leave taken should be more than 2 or 3 days to avail the benefit?
I travelled Bangalore to Delhi over a weekend and took just one extra day off on a Monday. Am I not eligible to claim this travel?
@Saurav
Most of the companies have minimum 2 days earned leave policy to claim LTA.
Please confirm same from your employer.
ok then tell me one thing , if my employer is not going to collect any proofs for LTA now in this case when he is going to deduct TDS on salary, on that time without submitting any proofs for LTA i can claim for exemption or not, or without collecting any proofs employer can provide exemption for LTA or not? if yes then is there any issues from the government side, i mean IT department. so without submitting any proofs how could i claimed for LTA?
@Amit Jha
Please see this court ruling: http://courtnic.nic.in/supremecourt/temp/ac%2099305p.txt
You still need to submit claim reimbursement forms with your employer with details like place traveled, dates and fare on bus/train/airline.
Income tax department may ask for actual proofs later, if they have doubt.
Hi Pankaj,
I have the following question w.r.t. LTA TAX exemption.
I made a travel in Dec’2010 and did not claim LTA and hence not submitted the travel detail for 2010-11. This year I claimed LTA (for both years: 2010 & 2011) and sumbitted the travel details/leave card details of last years travel for tax exemption. However my employer rejected saying I cannot submit the travel details/leave card details of last years to this years and said that I should have submitted the same before Mar 31st of 2011. I am confused!! Clarify me if one can ACCUMLATE THE LTA and also the travel details and claim the LTA and TAX exemption on the claimed LTA amount. Also, What does claim for 2 times in a period of 4 years. mean for a common man for both LTA claim and on LTA TaxExemption?
Thanks for your time in advance.
-DK
@Dk
Your employer is right in rejecting your claims for travel done in year 2010. Travel done in a calender year should be claimed with employer before end of financial year. This can’t be accumulated for future claim.
As per income tax LTA rules, one can claim leave travel allowance as non taxable only twice in block of four years. Current block is Jan 2010-Dec 2013.
So if your package structure has LTA component, your employer can only make it non taxable two times in these four years and remaining two times, employer will pay only after deducting taxes.
Hi Pankaj,
Thank you so much for clarifying my doubt.
Actually last month i have travelled to my home town as my 2 CLs are getting elapsed, but that is during weekdays. In this regarding can i claim for LTA for those 2 days ?
Is it mandatory that i should have taken 4 days paid leaves ?
CLs will not be used for LTA ?
Regards,
Rekha
@Rekha
It would depend on your company’s policy.
Most companies do not allow LTA claim on casual leaves. They make it compulsory to take minimum two earned leave in order to claim travel allowance.
Thank you for providing your valuable answer.
Hello Pankaj,
I have a query for LTA. I want to claim LTa for this financial year. I have travelled to Chandigarh this year in the month of May’11 and now in Feb’12 I will be travelling to Jammu. Can I claim for the travels of the same financial year for LTA.
@Girish
Ideally, as per income tax LTA rules, you should be able to claim both travels as non taxable as they fall in different calender years. But most of the employers align LTA to financial year and allow one claim per FY.
So, you would need to confirm same from your employer.
Thank you Pankaj for the perfect answer …
Hi,
I use my company car. My questions is: Can I claim LTA against one of my recent trips to my native place while on vacation using this company vehicle? I have the toll receipts issued enroute as well as the petrol bills.
Sanjay
@Sanjay
Petrol bills and toll receipts won’t be accepted for LTA claim. It has to be either train/bus/airline tickets or payment receipt to a travel operator.
Hi Pankaj,
I am planning to go to Jamshedpur this April for a week. I am travlling from Bangalore – Kolkata by flight and from Kolkota to Jamshedpur by taxi.
I will take the same route while travelling back to bangalore
So my itenary would be
Onward journey
Bangalore – kolkota (by air)
kolkata – jamshedpur (by taxi)
Return Journey
jamshedpur – kolkata (by taxi)
kolkota – Bangalore (by air)
My parents are currently in Chennai. and they are planning to come to kolkata by train during the same time and join me at kolkota for the onward journey to Jamshedpur.
So their itenary would be
Onward journey
Chennai – kolkota (by train)
kolkata – jamshedpur (by taxi)
Return Journey
jamshedpur – kolkata (by taxi)
kolkota – Chennai (by train)
1) can i claim LTA for both myself and my parents (they are dependent)
Please advise on how to claim for the LTA
Thanks
Arvind
@Arvind
All travelers much accompany the person who is availing tax benefit, so you won’t be able to claim tax benefit of your parent travel.
Moreover, from Kolkata to Jamshedpur and return, max allowed exemption would be fare on public transport (bus/train fare). Even if you spend 10,000 Rs on taxi, if a govt bus/train route exists with fare of Rs 500, max exemption would be Rs 500 only on this route.
I traveled Delhi hyd by airline and from delhi -simla -manali-delhi by vehicle in october and I lost the boarding pass, so Can I submit the bill given by package delear i.e. UAE Exchange for LTA claim.?
@Ranjith
Officially there is no need to submit proofs to employer, but it would be needed in case income tax department ask it later.
i have two query
1. suppose I worked in a company from jan 2010 to nov 2011.
my LTA was 1000 per month i.e i got 23000.
In my new company my lta is 2000 per month i.e from dec2011 to march 2012
LTA = 8000.
Can i claim 23000 + 8000 = 31000 LTA?
if no how much i can claim?
2. my company pays LTA monthly bases lets say 1000
i went for travel in august 2011.
How much can i claim?
is it the amount from jan 2010 to aug 2011 or jan 2010 to march 2012?
@Suri
As you have already left previous employer, you can now claim only what your current employer pays.
In case employer pays on monthly basis, max amount which can be claimed in a year would be 12 times monthly amount only.
Can i claim LTA i.e form pervious company and current company(31000) on filling return? i have billls.
@Suri
You cannot claim LTA exemption in income tax return form as form does not have any fields for same.
However you can reduce taxable income by that amount and recompute tax and claim for refund of tax extra paid.
There are chances that income tax department may issue refund. As there will be gap between form-16 and ITR values, income tax department may also raise query to explain the same and show proofs for travel done.