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Proof of travel not required for claiming LTA : Supreme Court

Dear All,

Please find very useful decision with regards to claiming LTA without supportings as below :-

LTA : Evidence of Expenses

Employers, while processing 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 Jan 21, 2009.

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 utilised the amounts obtained against these claims on travel and related expenses.

Case Details

CIVIL APPEAL NO.993 OF 2005 / WITH  NO. 992 OF 2005



    A short question which arises for determination in these Civil Appeal(s) is whether the assessee(s) was under statutory obligation under Income Tax Act, 1961, and/or the Rules to collect evidence to show that its employee(s) had actually utilized the amount(s) paid towards Leave Travel Concession(s)/Conveyance Allowance?

    It may be noted that the beneficiary of exemption under Section 10(5) is an individual employee. There is no circular of Central Board of Direct Taxes (CBDT) requiring the employer under Section 192 to collect and examine the supporting evidence to the Declaration to be submitted by an employee(s).

    For the above reasons there is no merit in the Civil Appeals and the same are dismissed with no order as to costs.

LTA Exemption: Other Important Points.

    Amount paid by employer to employee towards leave travel allowance is exempt from income tax .

    An employee can get LTA exempt twice in a block of four years.

·     Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year. So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year. If you make two trips in a year, you lose one

    Right now the block that is relevant is 2010-2013. These blocks are calendar years and not financial years.

·     You can carry forward your LTA. One LTA can be brought forward and claimed in the first year of the next block.  Let's say you do not take your LTA in 2002-05. Or that you use only one LTA. You will be able to take the pending LTA in 2006. This means that, in the 2006-09 block, you will be totally entitled to the three journeys..

    The amount to be claimed is expense on journey by air, rail or private rental company .

However the exemption is only for domestic travel and not for international travel. Only travel bills can be used exemption, so a hotel bill can't be produced for claiming exemption

    The journey tickets / expenses can be  for the employee  and family i.e. spouse, children, dependant parents, brothers and sisters.

·     If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself or, if claiming for your family, you should travel with them.


CA Pramod Jain

Published by

CA Pramod Jain
(manager finance)
Category Income Tax   Report

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