LTA -Exempt

[Siraj Shaikh]

As per CTC, company has to pay LTA. LTA is exempt twice in a block of four years. Employee submits the Invoices for his travel twice in a block of four years. The Invoices turns out to be fake. What is the liability on the Employer Company ???? Since, it is exempt twice in a block of four years, company has not deducted tds on it. Whether the LTA paid by the company will get disallowed ?????

[Ashwani Rustagi]

The benefit of LTC exemption under section 10(5) is available to an individual employee. Also, there is no circular of CBDT requiring the employer under section 192 to collect and examine the supporting evidence to the declaration to be submitted by the employee.

Threrefore, it was held that the assesse-employer was under no statutory obligation to collect the evidence to show that its emplyees had actually utilized the amounts paid towards leave travel concession. Refer to decision of the Supreme Court of India in the case of Commissioner of Income Tax Vs. Larsen & Toubro Ltd.

 

 

 

AI Summary

Leave Travel Concession exemption: employer not required to verify employee travel vouchers before payroll withholding. Leave travel concession exemption is a benefit of the individual employee and employers are not statutorily required to collect or examine supporting travel vouchers when applying payroll withholding; employer withholding duties do not impose an obligation to substantively validate employees' LTA claims, a position reflected in judicial precedent.