Taxation of Leave travel assistance &TDS

This query is : Resolved

Prakash Mehta (Querist)
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03 October 2008 Under the Income tax LTA is exempt for two jounerny in the block of four year. section 10(5) mentioned LTA recived or due is exempted to the extent of expenditure incurred subject to limit prescribed.
The company provides the liability in year to year basis but payment is made when claimed by the employee. The company cosider the LTA income in deducting tax from salary in the year of payment. However,in income tax LTA is taxable on Due basis also.

Now suppose LTA due in A.Y.08-09 but not claimed by employee as he has not performed the journey.In the next assessment year he has performed jounery and received the same. in such circumstances, in which year LTA to be taxed and claimed the exemption and why?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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03 October 2008 LTA to be taxed only in the year of payment to the employee.

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