Friday, February 10, 2012

Leave Travel Concession/Assitance LTA/LTC u/s 10(5) exemption


on Friday, February 10, 2012

Please provide me the provisions of LTA and documents required in respect of it. Is it possible to allow an employee to avail the benefit of it in the first year of their service.
Further I want to know as a employer what are my responsibilities as employer while allowing exemption u/s 10(5) and what type of documents I have to demand from employee claiming LTC.

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Ans:Leave Travel concession is exempted u/s 10(5) as per detail given below


  1. Leave Travel Concession (LTC)/Leave Travel assistance (LTA) received from employer to proceed on leave to any place on India for himself and his family is exempted.
  2. LTC/LTA received from employer or former employer received in connection with proceeding to any place in India after retirement/termination for himself and his family is also exempted
  3. The exemption is allowed only if actual expenses has been incurred.


Family Meaning :
  1. The spouse and children of Individual.
  2. Parents,Brothers,sister of individual who are wholly or mainly dependent on Him.
Two Journey in a Block of Four Years is exempted:Exemption is allowed on two journey in block of four years.present block is running from 2006-09 .The block of four year is taken on the basis of Calender year.

Carry forward of LTC In next block:if assessee has not availed LTC exemption in Last block of four years (single or both) than he can carry forward single(one)  exemption in first year of next four year block and can perform journey in first year of the next four year block.(single journey of the old block period can be carry forward and exemption can be availed in first year of next block of four year) .It is also clarified here that two journey actually belongs to next /new block of four years have no impact of carry forward of the old Journey performed in new block period of four years.


Amount Exempted.

A) Journey performed by Air

amount exempted:Economy Air fair of National carrier by the shortest route or the amount spent which ever is less.

B) Journey performed by Rail

Amount exempted: A.C. first class rail fare by shortest route.or amount spent which ever is less.

C) Place of origin and destination place of journey connected by rail but journey performed by other mode of transport.

Amount exempted :A.C. first class rail fare by shortest route.or amount spent which ever is less.

D) Place of origin& destination not connected by rail(partly/fully) but connected by other recognised Public transport system.

Amount exempted:First class or deluxe class fare by shortest route or amount spent which ever is less.

E) Place of origin& destination not connected by rail(partly/fully) and not connected by other recognised Public transport system also.

Amount exempted:AC first class rail fare by shortest route (as the journey had been performerd by rail) or the amount actually spent ,which ever is less.

Exemption On actual Expenses Only:The amount of exemption is Limited to actual expenses only .Means allowed only if actual journey is performed.

Exemption Of Fare Only:Exemption is allowed only for fare Only as explained above .Other expenses like Local conveyance charge ,taxi charges,lodging ,boarding charges is not exempted.

Exemption is allowed only for Two children if born after October 1,1998: This restriction does not apply to multiple birth after birth of first child and birth before October 1,1998.

On the basic of above answer to your quires is that a employee can perform jouncy in first year of employment as far as Income Tax act is concerned ,no bar on it .Moreover if he satisfy above condition of block period than he can claim exemption on amount actual spent and allowed as stated above which ever is less.

Secondly as DDO(drawing and disbursing Officer) /employer we should collect enough evidence /reasonable evidence to establish that the journey has actually been performed and amount offered for exemption has actually been spent by the employee.Mere certificate ,received from the employee that he has spent so much amount on LTC is not enough to allow exemption u/s 10(5) while calculating salary income for TDS(tax deducted at source) u/s 192.So we should collect Ticket photocopy where ever practicable or Ticket Number or agent bill etc as a proof that journey has actually performed to avoid complication at later stage.

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  1. How much TDS is to be deducted on the fees paid to a consultant ?

    ReplyDelete
  2. Tds is deductible only if amount paid in a year is more than 20000 and tds rate is 10% plus surcharge 10% on tax if applicable and 3 % cess on tax and surcharge amount .so net rate will be 11.33 5 if surcharge is applicable and 10.30 if not .moreover rate can be downloaded from the following link
    http://simpletaxindia.blogspot.com/2007/10/free-tds-calculator-fy2007-08-excel.html

    ReplyDelete
  3. now with Supreme Court having given judgement that Proofs are not required while claiming LTA ! Pl throw light on this in context to the Judgement given If i am correct Judgement was given on 5th March 2005

    ReplyDelete
  4. Srikanth N.R,

    Our company is providing LTA every year. To get the tax exemption, can I avail once in two years by clubbing 2 years LTA ?

    ReplyDelete
    Replies
    1. The query is company related ,nothing to do with income tax .So please confirm the same from your company

      Delete
  5. Sir two questions
    1. if employee has made travel during may 2012 , when can lta benefit be claimed. can it be claimed in the return filed for FY 2011-12 opr in return for FY 2012-13?
    2. If in the previous years returns LTA amounts are shown in taxable salary, and if journey is taken in 2012, then how to take benefit of taxable amounts of earlier year?
    plz do reply
    Regds
    Chintan

    ReplyDelete
    Replies
    1. You can claim the benefit by revising the return.

      As you have received LTA in previous year But could not proceed for it , In previous year it should be treated as advance and not a taxable income however now this can be corrected by revising your previous year return

      Delete
  6. Sir,

    Kindly advice if an employee takes LFA encashment ( Lump Sum LTC ) and travels abroad. He has all proof of travel documents. is there any way his and family's travel can be considered for exemption under the current IT law.

    Thanks !

    Nitin

    ReplyDelete
    Replies
    1. LTC exemption is available in India only

      Delete
  7. Pl. let me know if for the purpose of exemption under LTC availment, local conveyance charges viz. taxi from airport / railway station to city center or vice versa is admissible.

    Regards,
    Rajiv

    ReplyDelete
  8. My query is in light of Supreme Court's verdict whereby the employer need not ask for travel proof for providing tax exemption on LTA.

    My LTA eligibility is Rs 64,000/- for FY2012-13. I have submitted airline boarding passes to employer and mentioned spent amount on air tickets as Rs 53,000/- but NOT submitted air ticket/ receipt. The employer is insisting on submitting air ticket/receipt.

    While I understand, I will have tax liability on 64,000-53,000 = Rs 11,000/-, is it mandatory to submit air ticket/ booking agent's receipt to the employer to avail of tax exemption?

    ReplyDelete
    Replies
    1. Their are two issue involved .First issue is regarding taxability and second is admissibility or eligibility .

      In first supreme court rule is applicable ,In the case employer says himself that he is not bound to collect proofs from the employee. so case is in favor of employer.

      Now the second issue admissibility ,for this issue companies can make their own rules which are bound to be followed by the employees .so yes employer can demand air tickets /expenses details from you .

      Delete
    2. Thank you so much for the prompt clarification!
      Regards.

      Delete
  9. Hi,
    Can I claim LTA for a weekend trip, where I have not taken any 'leave'?
    I am planning to take a weekend trip on 18,19,20 August 2012. 20th is a public holiday. Can I claim LTA for this trip ?
    Regards...


    ReplyDelete
  10. as LTA is allowed to claim twice in a block of four years. so what happens to the tax liability in the first year if i claim LTA in the secound year of the block

    ReplyDelete
  11. I have travelled during december,2011. Can I get tax benefit for that travel on this financial year? I have not done any LTA claim in 2010-2013 block yet. Am I eligible for tax excmption for 2011 december travel in the current financial year (april 2012 - march 2013)?

    ReplyDelete
  12. can anyone guide that LTA rules allows travelling multiple destination on Air travel. exapmle Delhi to portbalir & while retuning from port blair to Delhi via kolkota with a halt?

    ReplyDelete
    Replies
    1. LTC is admissible from delhi to Portblair through shortest route . Halting at kolkatta is not restricted . However fair under LTC rule shall be allowed through shortest route or actual which ever is less.

      Delete
  13. Hi, I went to J&K from Bangalore. I took a flight from Bangalore to Delhi and train from Delhi to Jammu. Can i claim fares for flight as well as train? Also, can we claim airport pickup and drop via taxi?

    ReplyDelete
  14. Sir,

    Is there any percentage fix for LTA.


    Regds,
    Anil

    ReplyDelete
  15. sir, if place of posting is delhi. As per LTC provision he is eligible for reimbursement of actual travel in india. if he goes from delhi to portblair and from portblair to shrilanka then it is a foreign trip. my question is whether his reimbursement by employer is taxable or not. second question is whether fare from delhi to shrilanka is taxable or portblair to shrilanka means what will be the departure place in the above foreign trip.

    ReplyDelete
  16. Hi,
    I had travelled with my family from Pune to Puri to Thiruvarur to Pune by road in a rented car.
    How do I claim for LTA and will this be a valid case for LTA exemption ?
    Eagerly awaiting your comment.

    ReplyDelete
    Replies
    1. Exemption will be restricted to rail fare only

      Delete
    2. If there is no rail service connecting Pune - Puri, or Puri - Thiruvarur, or Thiruvarur - Pune.
      How will rail exemption be calculated ?
      Can you please guide ?

      Delete
    3. if no rail service than rates of Public transport system will be considered (like Govt Bus)

      First class or deluxe class fare by shortest route.

      Further you can claim exemption for one station only ,however you can stay at places falls in between.

      Delete
    4. Thank you very much for the guidance Raja Babu.

      Delete
  17. Sir,
    I am a Delhi government employee.I had joined in January 1997.First time I availed for home town LTC in December 2012 of block year 2010-11 only.
    Now I want to take LTC for anywhere in India again in May 2013.So,please give your suggestion am I eligible or not?

    ReplyDelete
  18. I am planning to travel around 20th March 2013 . can you please advice me how and when can i claim my LTA . and also for which Block will it be considered.

    ReplyDelete
  19. I am planning to travel around 20th March 2013 . can you please advice me how and when can i claim my LTA . and also for which Block will it be considered.

    ReplyDelete
  20. i went from jind to jammu via taxi hired car .can i claim LTA. i have receipt from the taxi driver

    ReplyDelete
  21. I have travelled in April 2013 while working at an organization. But will be changing the organization this month. How can I claim the tax rebate for the expenses incurred and which financial year should I claim it in? Thanks

    ReplyDelete
    Replies
    1. You should submit the documents to company and company will provide you exemption itself .It is available in fy 2013-14

      Delete
  22. I have traveled with my family to Goa in January 2013. Now I also intend to travel with my family to Kashmir in November 2013. My Company pays fixed LTC amount under own Rules, irrespective of the number of trips. Can I club expenses of both these trips to claim LTC exemption under IT ? This total claim will be my second claim in the block 2010 - 13.

    Kindly clarify. Thanks in advance.

    ReplyDelete
    Replies
    1. No ,you can't claim exemption by clubbing both the trips,

      however as said above you can claim two journey in block of four years and Block period is 2009-13 .If you have not claimed any journey in 2009-12 then both journeys can be claimed for exemption 2013 it self

      Delete
  23. Sir,

    My place of posting is in Jamshedpur, I have travelled alone from Jamshedpur to Trivandrum (rail+Air) and took my family for an all india tour ie., trivandrum to Udaipur (Air), Udaipur to Delhi (rail) and Delhi to Jamshedpur (rail).

    Kindly advice me which part of the journey is eligible for tax relaxation under income tax act.

    ReplyDelete
    Replies
    1. Journey Only through shortest route is allowed ,so you can claim Jamsgedpur to Trivandrum and back

      Delete
  24. Dear sir

    in our company we provide fixed LTA every year and will not be taxed if proof of expense is provided else the money is disbursed.
    The issue is since the year 2010 no claim for tax benefit has been made and company has disbursed the LTA amount and taxed the employee. In the year 2013 the employee has decided to claim the LTA benefit. His receipt is say Rs. 5000 every year and paid taxes for three years and on the fourth year of the block undertook Leave travel and spend 30000. can he claim exemption for the whole block of 20000. the disbursement by the company for the fourth year is only 5000.

    Kindly clarify

    ReplyDelete
  25. Will the exemption be available in case of dependant children?

    ReplyDelete
  26. This comment has been removed by the author.

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  27. Sir,I have received LFA IN JANUARY 2013 for block period of 2013-14 taxed accordingly in my return of fin year 2012-13.now I have taken a fAmily tour in December 2013 and want to get tax reimbursement what can i do-pl guide me.

    ReplyDelete
  28. My company doesn't provide LTA,

    1. Is this right or they are bound to provide LTA( size >250, p.f., hra etc. are there).
    2. Can I still claim LTA while filing my return.

    ReplyDelete