Saturday, May 11, 2013

No 'LTC' exemption outside India even if part of it is performed in India


on Saturday, May 11, 2013

IT : LTC is exempt from tax only when employee has utilized LTC for travel within India. Nothing in Rule 2B provides assessee a liberty to claim exemption where part of his total ticket package is spent on his overseas travel and part of his journey being within India

Facts

• Assessee received LTC from his employer, the State Bank of India and claimed exemption of LTC.

• AO noticed that leave travel package covered Singapore ad Malaysia also. AO disallowed LTC exemption claim as section 10(5) does not allow exemption for overseas travel. CIT(A) upheld AO's orders. Hence Present appeal to ITAT.

Held

• The provisions of the Act are in relation to LTC for proceeding on leave to any place in India.

• LTC is exempt from tax only when employee has utilized LTC for travel within India.

• Nothing in Rule 2B provides assessee a liberty to claim exemption where part of his total ticket package is spent on his overseas travel and part of his journey being within India.

• In result, assessee's exemption claim under section 10(5) rejected.

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