Now, you don't need proof to claim LTA and conveyance.
NEW DELHI: Employers, while assessing the conveyance and leave & travel allowance (LTA) claims of their staff, are under no statutory obligation to collect supporting evidence and furnish them to tax authorities, the Supreme Court said on Wednesday.
A bench comprising Justice SH Kapadia and Justice Aftab Alam said that assessee employers are under no statutory obligation to collect bills and details to prove that the employees had utilized the amounts obtained against these claims on travel and related expenses.
According to prevailing rules, if claims on LTA and conveyance are not supported by journey bills, they would be taxed. For instance, on an LTA allowance of Rs 1 lakh, if documentary proof such as air tickets, taxi vouchers, and other public transport bills are submitted only for Rs 50,000, then tax is applicable on the rest of the amount.
Regardless of the amount an executive is entitled to as LTA, tax laws allow air tickets only in the domestic sector for the claim.
The apex court order came in a plea by companies including Larsen & Toubro and ITI. In its defense, the revenue department had argued that assessee companies were under a statutory obligation under the Income Tax Act, 1961, and relevant rules, to collect documentary proof to show that their employee(s) had actually utilized the amount paid towards the leave travel concession and conveyance allowance.
From India, Delhi
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NEW DELHI: Employers, while assessing the conveyance and leave & travel allowance (LTA) claims of their staff, are under no statutory obligation to collect supporting evidence and furnish them to tax authorities, the Supreme Court said on Wednesday.
A bench comprising Justice SH Kapadia and Justice Aftab Alam said that assessee employers are under no statutory obligation to collect bills and details to prove that the employees had utilized the amounts obtained against these claims on travel and related expenses.
According to prevailing rules, if claims on LTA and conveyance are not supported by journey bills, they would be taxed. For instance, on an LTA allowance of Rs 1 lakh, if documentary proof such as air tickets, taxi vouchers, and other public transport bills are submitted only for Rs 50,000, then tax is applicable on the rest of the amount.
Regardless of the amount an executive is entitled to as LTA, tax laws allow air tickets only in the domestic sector for the claim.
The apex court order came in a plea by companies including Larsen & Toubro and ITI. In its defense, the revenue department had argued that assessee companies were under a statutory obligation under the Income Tax Act, 1961, and relevant rules, to collect documentary proof to show that their employee(s) had actually utilized the amount paid towards the leave travel concession and conveyance allowance.
From India, Delhi
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Thanks, Anurag, for the information provided. However, if you could please share any links or documents that have more detailed information about LTA and its terms and conditions, that would be very helpful. Thank you once again.
Amrutha
From United States, Winston Salem
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1Amrutha
From United States, Winston Salem
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Dear all,
Please find the link to the registration of the Supreme Court decision on LTA: [Proof of travel not required for claiming LTA: Supreme Court](http://www.indiabroadband.net/news-views-business-world/13997-proof-travel-not-required-claiming-lta-supreme-court.html).
Thank you.
From India, New Delhi
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Please find the link to the registration of the Supreme Court decision on LTA: [Proof of travel not required for claiming LTA: Supreme Court](http://www.indiabroadband.net/news-views-business-world/13997-proof-travel-not-required-claiming-lta-supreme-court.html).
Thank you.
From India, New Delhi
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SUPREME COURT DECISION ON BASIC WAGES.pdf