Lta claim

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2017 LTA per year - 25000/-
Employer doesn't claim LTA for first 3 years of the block. Can he claim for 1,00,000/- (i.e, 25,000per year X 4 years) in 4th year?
If yes what will the employer do if he deducted TDS on unclaimed LTA credited to employee's account for 1st 3 years? Will he refund the TDS deducted ?

Amol S Joglekar

Amol S Joglekar (Expert)
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03 July 2017 you wrote EMPLOYER does not claim LTA for first 3 years.....
I am sorry...can you please explain how EMPLOYER claims LTA?

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2017 its a typo. I meant employee.

Amol S Joglekar

Amol S Joglekar (Expert)
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04 July 2017 1. LTA exemption is not automatic.....The conditions being A. actual expenditure incurred B. proceeding on leave for employee himself or herself C. 2 journeys in the block of 4 years....2010-13, 2014-17
In the query, the actual expenditure is not given.
2. Employee is in receipt of LTA every year. S/he can claim exemption twice in the block of 4 years.(25000 or actual expenditure whichever is lower). The employee can NOT ask for refund if any for the LTA taxed in the earlier year.

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2017 i understand that LTA is not automatic & subject to limits. my question is whether the employee can claim tax benefit on the aggregate LTA during the block i.e 25k x 4=1L or only for 25k during the year of claim.

Amol S Joglekar

Amol S Joglekar (Expert)
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06 July 2017 since the employee is in receipt of LTA per annum, he can claim exemption only upto 25000 or the actual travel expenses whichever is lower.

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2017 thanks for the reply. Could you point out in the Act where it restricts exemption to only annual limit.

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2017 or from which wordings of the act u infer ur conclusion

Amol S Joglekar

Amol S Joglekar (Expert)
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06 July 2017 please try to take into account that Income tax act aims at the income of financial year. When the assessee is getting LTA on per year basis, it goes to the taxability of the respective year. Twice in 4 years, the assessee is entitled for exemption of LTA subject to his proceeding on leave etc......
It, therefore, follows that in any 2 years out of 4 years' block, the assessee can claim exemption for LTA..... actual expenditure or 25000 whichever is lower....

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Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2017 appreciate ur time

Amol S Joglekar

Amol S Joglekar (Expert)
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06 July 2017 you are most welcome.....