03 January 2008
This is with reference to computation of amount of exemption for the purpose of LTC u/s 10 (5) read with Rule 2B.
As per the Rule 2B, where the place of origin of journey and place of destination are connected by rail and journey is performed by any other mode of transport (i.e. other than by way of Air or Rail) then the amount of exemption will be lower of :
1) the amount of air-conditioned first class rail fare by the shortest route; or 2) the actual amount spent.
At present by the employer, for the purpose of clause (1), the amount of air-conditioned first class rail fare is being calculated by taking the First AC Rail fare rate as provided in the Rail book (Trains at Glance) published by the Railways for total kilometers travelled by the person. For eg. if a family has travelled from Gandhidham to a far place of Assam like Dibrugarh via Delhi, then the total KM for one way shall be 3721 KMs approx. The Rail fare for 3721 KM as per the book shall be Rs. 4287/- per person. Whereas, the actual fare for the same would have been more then the amount provided in the Rail book as follows:
1) Rail fare from Gandhidham to Delhi for Ala Hazarat Rs 1366/- per person (II AC fare as the train departing from Gandhidham does not have Ist Class AC ); and 2) Rail fare from Delhi to Dibrugarh for Rajdhani Exp Rs 4945/- per person (Ist AC fare)
The total of the above fare is Rs 6311/- per person which is more then the amount as given in the Rail book and beneficial also.
Our query is regarding the amount to be considered for exemption. Whether it should be Rs. 4287/- i.e. as per the Rail book (which prescribe direct fare whether direct train is available or not) or the Actual Amount i.e Rs 6311/- per person?
In my opinion, the actual amount which would have been incurred (considering the route & class facility available at present), should be considered and not the amount which is appearing in the Rail Book as it will result into lesser amount of exemption and higher amount of Tax and TDS.
Advice of memeber is required on the above matter.
11 January 2008
Hi Dushyant, Sandeep here. I think 1st class ac fare doesnot means actual fare it is the chargeable notional fare since you are not paying for railway, there may be situation when rail facilities are not available, then what will be the situation. Any way also try at your level.
28 February 2008
It is a practical problem but the rules are worded like that; only way is to get the rules amended by representation through appropriate forum
CAclubindia
