Dear Seniors,
Is is mandatory that for availing the benefit of LTA employee should have taken leaves?
If the employee had travelled during company holiday days then can the employee claim LTA for this period?
Thanks in anticipation.....
From India, Pune
467Is is mandatory that for availing the benefit of LTA employee should have taken leaves?
If the employee had travelled during company holiday days then can the employee claim LTA for this period?
Thanks in anticipation.....
From India, Pune
Dear Prashant
What is the meaning of LTA ??
That itself will help you solve your query to some extent.
Moreover, what is the duration of company holidays ??
Is it sufficient for vacationing ??
Warm regards.
From India, Delhi
What is the meaning of LTA ??
That itself will help you solve your query to some extent.
Moreover, what is the duration of company holidays ??
Is it sufficient for vacationing ??
Warm regards.
From India, Delhi
the very name Leave Travel Assistance itself is suggestive of the fact that the facility is available while availing leave only and hence in my view, the employee shall avail leave to travel on such leave to the destination declared under the LTA policy of the company.
B.Saikumar
HR v& Labour Law Advisor
Mumbai
From India, Mumbai
B.Saikumar
HR v& Labour Law Advisor
Mumbai
From India, Mumbai
Dear Prashant ji,
This is just to add Raj Kumar ji and Sai Kumar ji.
LTA/LTC is a monetary benefit that an employee gets from his employer for proceeding on leave to any place in India.
Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt, as under:
• The employee should take leave from his company
• S/he should actually travel
• The necessary travel documents must be submitted as proof that the travel has taken place.
From India, Mumbai
This is just to add Raj Kumar ji and Sai Kumar ji.
LTA/LTC is a monetary benefit that an employee gets from his employer for proceeding on leave to any place in India.
Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt, as under:
• The employee should take leave from his company
• S/he should actually travel
• The necessary travel documents must be submitted as proof that the travel has taken place.
From India, Mumbai
Dear Friends,
Mr. Keshav has answered it beautifully.
key point,
Employee shall take leave from the company
He/ She shall actually travel
this is important to take any benefit under LTA rules, else any amount paid became exgratia and will be fully taxable in the hands of the employee.
Thanks,
Pankaj Patodi
CA
From India, New Delhi
Mr. Keshav has answered it beautifully.
key point,
Employee shall take leave from the company
He/ She shall actually travel
this is important to take any benefit under LTA rules, else any amount paid became exgratia and will be fully taxable in the hands of the employee.
Thanks,
Pankaj Patodi
CA
From India, New Delhi
I have missed the second part of Prashant's query whether the LTA benefit shall be allowed to an employee who visits the place during holidays.In my view it depends up on the company's policy. In the absence of any clear permissible provision in the company's policy, the LTA shall be admissible to an employee only while availing leave since leave and holidays are technically two different conditions of service with different implications and secondly the name of the facility is "Leave Travel Assistance" but not "Leave and holiday Travel Assistance."
B.Saikumar
Mumbai
From India, Mumbai
B.Saikumar
Mumbai
From India, Mumbai
Dear All,
My to the point answer to the querist is as under:
It is not mandatory for availling the benefit of LTA, the employee should have taken leave. LTA is not a mandatory payment. Company can have its' own rules and regulation. Company can have any nomenclature to such monetory payment.
LTA can be claimed by employee even he has not taken any leave as said above. So travelling during company holiday doesnot matter.
However, if employee wish to avail IT exemption, he should take leave from his company, he should actually travel and necessary travel documents must be submitted as proof that the travel has taken place.
LTA payment and LTA exemption u/r IT are two separete subjects.
From India, Mumbai
My to the point answer to the querist is as under:
It is not mandatory for availling the benefit of LTA, the employee should have taken leave. LTA is not a mandatory payment. Company can have its' own rules and regulation. Company can have any nomenclature to such monetory payment.
LTA can be claimed by employee even he has not taken any leave as said above. So travelling during company holiday doesnot matter.
However, if employee wish to avail IT exemption, he should take leave from his company, he should actually travel and necessary travel documents must be submitted as proof that the travel has taken place.
LTA payment and LTA exemption u/r IT are two separete subjects.
From India, Mumbai
Dear Keshav
I appreciate your answer, which is technically correct;
especially in case of certain private sector companiesl where LTA is just a perquisite added to CTC.
In certain such companies the payment is done even automatically; in-as-much-as one need not even "apply" for it.
However, in PSU's and Government service (as well as certain established private companies), its of the IT-compliant type as referred by you (quoted below).
Here, it is allowed only on :
- upon application on a prescribed format alongwith with applied leave period (can include company holidays, if any)
- block year basis
- based on mode of travel eligibility and no. of eligible dependents
- upon furnishing proof of travel
- misuse or false declaration is a punishable offence under the rules of the company
This is not to contradict your opinion; but to supplement it.
Warm regards.
From India, Delhi
I appreciate your answer, which is technically correct;
especially in case of certain private sector companiesl where LTA is just a perquisite added to CTC.
In certain such companies the payment is done even automatically; in-as-much-as one need not even "apply" for it.
However, in PSU's and Government service (as well as certain established private companies), its of the IT-compliant type as referred by you (quoted below).
Here, it is allowed only on :
- upon application on a prescribed format alongwith with applied leave period (can include company holidays, if any)
- block year basis
- based on mode of travel eligibility and no. of eligible dependents
- upon furnishing proof of travel
- misuse or false declaration is a punishable offence under the rules of the company
This is not to contradict your opinion; but to supplement it.
Warm regards.
From India, Delhi
Hi Prashant,
There is no restriction with respect to the number of days of leave that one must take in order to claim LTA. For example in West Bengal, around the Puja time there are successive holidays and an employee may not take PL but still avail LTA. LTA can be availed of during any leave including study leave, casual leave and special casual leave
The criteria for being eligible for tax deduction is that the money must have been spent and documentary evidence ought to be available with the employee.
Also the assessee employer is under no statutory obligation to collect evidence to show that its employee(s) had actually utilized amount(s) paid towards leave travel concession(s)/conveyance allowance - Ref CIT v. Larsen & Toubro Ltd. [2009] 181 Taxman 71/313 ITR 1 (SC). The onus of proving that the employee travelled and is eligible to claim tax exemption is mainly on the employee.
Employers while assessing the travel allowance claims, do not need to collect proof of travel to submit to the tax authorities. Though it is not mandatory for employers to demand proof, they still have the right to demand documentary proof depending on its policy. The Judgement of Supreme Court, cited above, has only moved the responsibility from the employer to the employee, the assessing officer can still ask for the employee to provide details of travel.
Regards
R Bhatnagar
From India, Bangalore
There is no restriction with respect to the number of days of leave that one must take in order to claim LTA. For example in West Bengal, around the Puja time there are successive holidays and an employee may not take PL but still avail LTA. LTA can be availed of during any leave including study leave, casual leave and special casual leave
The criteria for being eligible for tax deduction is that the money must have been spent and documentary evidence ought to be available with the employee.
Also the assessee employer is under no statutory obligation to collect evidence to show that its employee(s) had actually utilized amount(s) paid towards leave travel concession(s)/conveyance allowance - Ref CIT v. Larsen & Toubro Ltd. [2009] 181 Taxman 71/313 ITR 1 (SC). The onus of proving that the employee travelled and is eligible to claim tax exemption is mainly on the employee.
Employers while assessing the travel allowance claims, do not need to collect proof of travel to submit to the tax authorities. Though it is not mandatory for employers to demand proof, they still have the right to demand documentary proof depending on its policy. The Judgement of Supreme Court, cited above, has only moved the responsibility from the employer to the employee, the assessing officer can still ask for the employee to provide details of travel.
Regards
R Bhatnagar
From India, Bangalore
Raj Kumar has put the issue in right perspective.In public sector which is a major stake holder in country's economy, LTA is admissible only on availing leave but not on holidays.The employee shall necessarily avail leave and actually travel. It is not symbolic as in some private sector industries.Therefore it is prudent to have an enabling provision in company's policy in private sector to avoid conflicting interpretations subsequently.
B.Saikumar
HR & Labour Law advisor
Mumbai
From India, Mumbai
B.Saikumar
HR & Labour Law advisor
Mumbai
From India, Mumbai
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