Tax treatment for LTA
Querist : Anonymous
Querist : Anonymous
Check this link:
https://www.caclubindia.com/articles/proof-of-travel-not-required-for-claiming-lta-5007.asp
The article is stating that.employer no statutory obiligation for collection of bills it does not mean that with out bills you can claim LTA Exemptio and also no where mentioned proofs is not required for claimg LTA.Please don`t interept the Judgement wrognly and mis guide
and
practically LTA claiming some checking need to do for that bills employer has to be seen.for arguing purpose you can quote the judgement but practical my view is difficult
Querist : Anonymous
Appreciate clarity on the topic.
---
## ✅ **What is LTA?**
LTA is an exemption provided under **Section 10(5)** of the Income Tax Act, 1961, for travel expenses incurred by an employee **for travel within India**, either alone or with family, during leave.
---
## 📌 **Is it Compulsory to Submit Bills for LTA?**
### 1. **For Claiming Exemption Under Income Tax Act (Section 10(5)):**
Yes — **you must have proof of travel**, like tickets, boarding passes, or invoices. The law **requires actual travel** and the **exemption is limited to the amount spent on fare** (rail/air/bus).
So, **bills/proof of travel are required** if:
* You want to **claim LTA exemption** when filing your return.
* The **Assessing Officer (AO)** asks for supporting documentation during scrutiny.
---
### 2. **For Employer While Withholding TDS:**
Now, here's where the 2009 **Supreme Court ruling (CIT v. Larsen & Toubro Ltd.)** becomes relevant.
> 📌 **Judgment Summary**: Employers are **not under statutory obligation** to collect travel proofs from employees while allowing LTA exemption for TDS purposes.
So practically:
* **Employers may choose** not to collect proof — but they **can** if they want to stay cautious.
* The responsibility to **produce evidence** lies with the **employee** if the case is scrutinized by the tax department.
---
## ✅ **So What's the Practical Answer to Your Query?**
> **Q: Is it compulsory to submit LTA bills for FY 2009–10?**
> **A:**
* **To the employer**: **Not mandatory** as per the Supreme Court — but **many employers still require it** to avoid future complications.
* **For the employee (you)**: Yes, you must **keep bills as evidence** to claim LTA exemption under Section 10(5) and defend it if the I-T department scrutinizes your return.
---
## ⚠️ Common Mistake:
Claiming LTA without actual travel (and without bills) may **lead to disallowance** during assessment — and you may be taxed on that amount.
---
## 💡 Tip:
* Always **retain travel proofs** even if your employer doesn't ask for them.
* LTA exemption is allowed **only for travel fare**, **not hotel**, **meals**, or **sightseeing** expenses.
---
Let me know if you’d like a sample declaration format or help with understanding limits on LTA claims.
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