SBI Bank employee-ITR-2
This query is : Resolved
13 August 2025
My brother is working at SBI and his gross salary is ₹34.8 lakhs, which includes perquisites of ₹6.09 lakhs and Leave Travel Allowance (LTA) of ₹6.52 lakhs. His consultant advised him to file his return using ITR-2, as he has a short-term capital loss of around ₹3,000. He filed the return under the new tax regime. However, he claimed the entire LTA amount of ₹6.52 lakhs as exempt under Section 10(5). Is this claim acceptable, and will he need to provide any evidence if he receives a notice
13 August 2025
✅ 1. ITR Form Selection – ITR-2
Your brother correctly used ITR-2 because:
He has salary income, perquisites, and short-term capital loss.
ITR-1 is not applicable when there's capital gains/loss or income above ₹50 lakhs.
ITR-3 is not needed unless he has business/professional income.
So ITR-2 is appropriate.
✅ 2. LTA (Leave Travel Allowance) – Section 10(5)
Claiming ₹6.52 lakhs as fully exempt under Section 10(5) is not acceptable, unless:
The travel was undertaken within India,
The exemption claimed is only for the actual eligible travel cost (rail/air/bus),
The exemption does not include food, hotel, or local conveyance,
It's claimed only for self and specified family members,
The claim is within the block period and two journeys per block rule,
And he has actual supporting bills for the travel costs.
💡 Important: LTA exemption is not automatic — it's limited to the eligible amount, not the full LTA received.
🚫 Problem in this Case:
Claiming the entire LTA amount (₹6.52 lakhs) as fully exempt under Section 10(5) is highly unusual and likely excessive, unless there's a family of 8 flying business class multiple times — which is rarely justifiable.
This will likely trigger a notice or scrutiny under CASS (Computer Aided Scrutiny Selection).
📄 3. Documentation Required (If Notice is Received)
If your brother receives a notice under 143(1), 139(9), or 142(1), he should be ready to produce:
Travel tickets (flight/train/bus)
Boarding passes (if air travel)
Leave application/approval
Proof of travel undertaken (for family, if claimed)
Invoice/bill clearly showing fare breakup (only fare is allowed)
✅ What to Do Now?
Amend the return (revise ITR) if the LTA claim was mistakenly made in full — and instead, claim only the actual eligible amount.
Else, be prepared with supporting documentation, in case a notice is issued.
If revised, do it before 31st December 2025 (for AY 2025-26), and clearly show only eligible LTA as exempt.
Your brother correctly used ITR-2 because:
He has salary income, perquisites, and short-term capital loss.
ITR-1 is not applicable when there's capital gains/loss or income above ₹50 lakhs.
ITR-3 is not needed unless he has business/professional income.
So ITR-2 is appropriate.
✅ 2. LTA (Leave Travel Allowance) – Section 10(5)
Claiming ₹6.52 lakhs as fully exempt under Section 10(5) is not acceptable, unless:
The travel was undertaken within India,
The exemption claimed is only for the actual eligible travel cost (rail/air/bus),
The exemption does not include food, hotel, or local conveyance,
It's claimed only for self and specified family members,
The claim is within the block period and two journeys per block rule,
And he has actual supporting bills for the travel costs.
💡 Important: LTA exemption is not automatic — it's limited to the eligible amount, not the full LTA received.
🚫 Problem in this Case:
Claiming the entire LTA amount (₹6.52 lakhs) as fully exempt under Section 10(5) is highly unusual and likely excessive, unless there's a family of 8 flying business class multiple times — which is rarely justifiable.
This will likely trigger a notice or scrutiny under CASS (Computer Aided Scrutiny Selection).
📄 3. Documentation Required (If Notice is Received)
If your brother receives a notice under 143(1), 139(9), or 142(1), he should be ready to produce:
Travel tickets (flight/train/bus)
Boarding passes (if air travel)
Leave application/approval
Proof of travel undertaken (for family, if claimed)
Invoice/bill clearly showing fare breakup (only fare is allowed)
✅ What to Do Now?
Amend the return (revise ITR) if the LTA claim was mistakenly made in full — and instead, claim only the actual eligible amount.
Else, be prepared with supporting documentation, in case a notice is issued.
If revised, do it before 31st December 2025 (for AY 2025-26), and clearly show only eligible LTA as exempt.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- ECO SUPPLY REPORTIONG IN GSTR-1
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- CCFS 2026 Schemed
- Subscription paid to foreign customer
- Two seprate Invoice needed
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
