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Hi Vinay,
This may help you.
LEAVE TRAVEL CONCESSION
WHAT ARE THE LIMITS OF EXEMPTION IN L.T.C. granted to an employee in connection with the journey on leave by him or his family? It is exempt from income tax within certain limits as follows:
(a) Where the journey is performed by rail: railway fare in Second AC class by the shortest route to the destination.
(b) Where the places of origin and destination are connected by rail but the journey is performed by any other mode, then Second AC class fare by the shortest route to the place of destination.
(c) Where the place of origin of the journey and destination, or part thereof, are not connected by rail and the journey is performed by any other transport, then:
(i) If a recognized public transport system exists between such places, the first class or deluxe class fare of such transport by the shortest route, or,
(ii) If in another case, Second AC class fare for the distance of the journey by the shortest route, as if the journey has been performed by rail.
Exemption will, in no case, exceed the actual expenditure incurred in the performance of the journey.
Leave Travel Concession Rules have been amended on the recommendation of the Fifth Pay Commission to extend the facility of travel by air economy Y-Class to certain categories of employees of the Central Government with effect from 1st October 1997.
Consequently, where the journey is performed on or after 1st October 1997 by air, an amount not exceeding the air economy fare of the National Carrier by the shortest route to the place of destination.
Also, where the entitlement was previously for air-conditioned Second Class Rail fare, it has been upgraded to air-conditioned First Class Rail fare [L.T. (First Amendment) Rules 1998, O.O.I. Gazette Notification No. S.O. 34(E) dated 12th Jan 1998; CBDTF.No. 142/85/97-TPL No. 105021].
WILL THIS CHANGE APPLY ONLY TO GOVERNMENT EMPLOYEES OR DOES IT APPLY ALSO TO EMPLOYEES OF OTHER SECTORS?
The change applies to all employees.
HOW MANY TIMES CAN EXEMPTION BE CLAIMED?
The assessee can claim exemption in respect of two such journeys in a block of 4 years. For this purpose, the first block of 4 years was the calendar year 1986-89. For a block of 4 years, the journey performed in the first year following that block year is also eligible for exemption. Also, such a journey will not be taken into account for determining the tax exemption for the succeeding block.
TO QUALIFY FOR EXEMPTION, IS IT NECESSARY TO PERFORM AN ACTUAL JOURNEY?
Yes, certainly. In case the L.T.C. is encashed without actually performing the journey, the entire amount received by the employee would be taxed in his hands.
WHAT IS THE DEFINITION OF FAMILY FOR THIS PURPOSE?
For this purpose, "family" means:
(i) The spouse and children of the individual, and
(ii) The parents, brothers, and sisters of the individual or any of them, wholly or mainly dependent on the individual.
Conveyance allowance: It is exempted from Tax if it doesn't exceed Rs 800 per month, viz Rs 9600 p.a.
Regards,
Y. Venu Madhava Reddy
From India, Hyderabad
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This may help you.
LEAVE TRAVEL CONCESSION
WHAT ARE THE LIMITS OF EXEMPTION IN L.T.C. granted to an employee in connection with the journey on leave by him or his family? It is exempt from income tax within certain limits as follows:
(a) Where the journey is performed by rail: railway fare in Second AC class by the shortest route to the destination.
(b) Where the places of origin and destination are connected by rail but the journey is performed by any other mode, then Second AC class fare by the shortest route to the place of destination.
(c) Where the place of origin of the journey and destination, or part thereof, are not connected by rail and the journey is performed by any other transport, then:
(i) If a recognized public transport system exists between such places, the first class or deluxe class fare of such transport by the shortest route, or,
(ii) If in another case, Second AC class fare for the distance of the journey by the shortest route, as if the journey has been performed by rail.
Exemption will, in no case, exceed the actual expenditure incurred in the performance of the journey.
Leave Travel Concession Rules have been amended on the recommendation of the Fifth Pay Commission to extend the facility of travel by air economy Y-Class to certain categories of employees of the Central Government with effect from 1st October 1997.
Consequently, where the journey is performed on or after 1st October 1997 by air, an amount not exceeding the air economy fare of the National Carrier by the shortest route to the place of destination.
Also, where the entitlement was previously for air-conditioned Second Class Rail fare, it has been upgraded to air-conditioned First Class Rail fare [L.T. (First Amendment) Rules 1998, O.O.I. Gazette Notification No. S.O. 34(E) dated 12th Jan 1998; CBDTF.No. 142/85/97-TPL No. 105021].
WILL THIS CHANGE APPLY ONLY TO GOVERNMENT EMPLOYEES OR DOES IT APPLY ALSO TO EMPLOYEES OF OTHER SECTORS?
The change applies to all employees.
HOW MANY TIMES CAN EXEMPTION BE CLAIMED?
The assessee can claim exemption in respect of two such journeys in a block of 4 years. For this purpose, the first block of 4 years was the calendar year 1986-89. For a block of 4 years, the journey performed in the first year following that block year is also eligible for exemption. Also, such a journey will not be taken into account for determining the tax exemption for the succeeding block.
TO QUALIFY FOR EXEMPTION, IS IT NECESSARY TO PERFORM AN ACTUAL JOURNEY?
Yes, certainly. In case the L.T.C. is encashed without actually performing the journey, the entire amount received by the employee would be taxed in his hands.
WHAT IS THE DEFINITION OF FAMILY FOR THIS PURPOSE?
For this purpose, "family" means:
(i) The spouse and children of the individual, and
(ii) The parents, brothers, and sisters of the individual or any of them, wholly or mainly dependent on the individual.
Conveyance allowance: It is exempted from Tax if it doesn't exceed Rs 800 per month, viz Rs 9600 p.a.
Regards,
Y. Venu Madhava Reddy
From India, Hyderabad
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Leave Travel Allowance.doc
P. TAX EXEMPTION NOTIFICATION - CHHATTISGARH.pd f