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Whether it is necessary to pay convey. Rs.800 by cash ?

Sheetal (Sr. Executive [ Accounts & Finance ]) (49 Points)

09 November 2009

is that necessary to pay conveyance [ Which is part of the salary ] of Rs.800/- [ p.m.] by cash voucher to avail. deduction of convey. ?

if gross salary is 15000/- , how it should be bifurcated in various heads like Basic, Conveyance, HRA etc.

Also tell me how LTA to be calculated?

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4 Replies

K.Pandiarajan (Asst General Manager Finance & Accounts) (50 Points)
Replied 10 November 2009

There is no need to pay by cash even cheque payment, transfer to employee account is sufficient.

LTA is exempted 2 times between a block of 4 financial year. the payment should debited in LTA a/c in company books. Usually IInd A/c fair, hotel accommodation, boarding expenses are allowed.

For bifurcation of gross there is lot methods based on their IT ceiling

ANITA BHADRA (MANAGER(FIN)) (45 Points)
Replied 30 November 2009

Originally posted by :K.Pandiarajan

There is no need to pay by cash even cheque payment, transfer to employee account is sufficient.
LTA is exempted 2 times between a block of 4 financial year. the payment should debited in LTA a/c in company books. Usually IInd A/c fair, hotel accommodation, boarding expenses are allowed.
For bifurcation of gross there is lot methods based on their IT ceiling

Dear friend , What I understand that LTA is exempted for train/Air fare only . Pl . confirm whether hotel accomodation and boarding expenses are allowed as exemption . If yes , under which section of IT Act ? Regards

Anita Bhadra

CA Rahul Jain (CA) (1162 Points)
Replied 30 November 2009

it is not necessary to pay conv. allow in cash or cheque. as far as deduction is concerned, deduction shall be allowed on the basis of pay slip wherein conv. allowance wud be specifically mentioned.

CA Rahul Jain (CA) (1162 Points)
Replied 30 November 2009

Leave travel allowance is fully taxable.

however leave travel concession or leave travel assistance for the person and his family is exempt u/s 10(5) of IT Act, 1961.Some of the relevant terms are:

1. Amount exempt under this section shall in no case exceed the amount of expenses actually incurred for the purpose of such travel subject to the following:

2. where the journey is performed on or after the 1st day of October, 1997, by air, an amount not exceeding the air economy fare of the national carrier by the shortest route to the place of destination;

Where such travel concession or assistance is not availed of by the individual during any such block of four calendar years, an amount in respect of the value of the travel concession or assistance, if any, first availed of by the individual during first calendar year of the immediately succeeding block of four calendar years shall be eligible for exemption.

3. where places of origin of journey and destination are connected by rail and the journey is performed on or after the 1st day of October, 1997, by any mode of transport other than by air, an amount not exceeding the air-conditioned first class rail fare by the shortest route to the place of destination; and

where the places of origin of journey and destination or part thereof are not connected by rail and the journey is performed on or after the 1st day of October, 1997, between such places, the amount eligible for exemption shall be :

(A) where a recognised public transport system exists, an amount not exceeding the 1st class or deluxe class fare, as the case may be, on such transport by the shortest route to the place of destination; and

(B) where no recognised public transport system exists, an amount equivalent to the air-conditioned first class rail fare, for the distance of the journey by the shortest route, as if the journey had been performed by rail.

The exemption shall be available to an individual in respect of two journeys performed in a block of four calendar years commencing from the calendar year 1986.