Leave Travel Allowance (LAW)

This query is : Resolved

lalita

( Author )
23 September 2010

In the matter of Leave Travel Allowance Honourable supreme court (in the case of larsen & tubro ltd.) has given the verdict that the employers are not under statutory obligation to collect evidence from its employees. What if the employer still demands for the proof of travel?
And please also clarify what happens if the verdict of supreme court is not followed?

CMA Ramesh Krishnan

( Expert )
23 September 2010

My view

Employer need to follow the provisons of Income tax act, even though the verdict in suprme court, there is no specific provision available for not collecting the proof for LTA, also the provisons the employer has to verify the proofs, then only calculate the Income tax and deduct the TDS

lalita

( Author )
23 September 2010

Thank You SIR for the reply.
It really resolves the query.

B.Chackrapani Warrier

( Expert )
23 September 2010

Clause 5.2 of CBDT circular No.1/2010 dated 11/1/2010 is copied below.
It may also be noted that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.
Consequently, the employer has to satisfy the expenses on evidence.
But if the supreme court verdict is not followed by the employer, the employee,if so wish, can move contempt of court petition.