Accounts & Administration, Tax
Accountant In Construction Company
Pleased to provide you this information.
Terms for LTA:
1) The Travel should be made within India
2) The employee should have been on leave during the time of travel.
3) One Round Trip (To & Fro) is only allowed.
4) LTA has a concept of Block years. One Block is made up of 4 years.
5) The current Block is from 2010 to 2013.
5) An employee can claim LTA as twice as non-taxable in a block. The other two instance is any way subject to tax.
6) The mode of travel should either by Train/Public Transport/National Carrier. Else exemption would be restricted to such extent.
7) The trip should have been made by the shortest route possible.
Hope these points would suffice your requirement.
Thanks & Regards,
Mohan Kumar. B
26th January 2010 From India, Pune
27th January 2010 From United States, San Jose
The LTA must be given 2 times in the block of 4 years, ie., The employee must produce the proof of travel and other expenses. Wherever he has not produced the bill, Income Tax has to be deducted by your Finance Dept. If you wish so, you may opt to give once a year also, but you can exempt your employee from Tax only once in two years.
28th January 2010 From India, Bangalore
hope this helps you.
please forward ne further query or anything you know bout it..
Great process of learning.
28th January 2010 From India, Pune
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).”
Hence, from now on,*Employee*will not have to*submit proofs*as evidence, to their*employers*for getting*LTA*(leave travel allowance)*reimbursement.
28th January 2010 From India, Calcutta
LTA calculation is done taking into account the designation/cadre of an employee.
It varies for different companies - eg-
LTA is given in the company depending upon different rules/norms.
It is normally given to an employee after every 2 or 3 years of service period in the organization.
An employee shall be entitled for allowance subject to a maximum distance (to & fro) of 4000 Km. An employee who is posted at a place which is more than 1000 Km. away from his home town, shall be entitled for allowance for an additional 1000 Km.
A person should also have EL (earned leaves) in their account.
It is also on the subject if both husband and wife are workign in the same organization, only 1 has the priviledge of availing the same.
There are also various rules involved in the same.
Lemme know what exactly you are looking for.
28th January 2010 From India, Chandigarh
Please note that even though The Hon'ble Supreme Court has given a verdict stating that an employer is not required to ask for proof of travel from the employee to provide exemption for the LTA Payment.
It would be noteworthy to look into the circumstances that led to this verdict. If people would go through the verdit carefully, all could note that the verdict says that "Since the section related to LTA is not covered under Sec 192 B (section regulating Tax on Salaries), it is not binding on the employer to collect the proof".
Please note that the Central Board of Direct Taxes (CBDT) can at any point of time notify and bring this under the purview of Sec 192 B with retrospective effect.
Therefore it is always advisable to collect the proofs to be on a safer side.
30th January 2010 From India, Pune