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

Employers Not Liable for Fake LTA Invoices Submitted by Employees Under Section 10(5) Exemption Rules An employee queried about the employer's liability when fake invoices are submitted for Leave Travel Allowance (LTA), which is exempt twice in a block of four years. The employer did not deduct TDS based on this exemption. The response clarified that under Section 10(5), the LTA exemption applies to individual employees. Employers are not statutorily required to verify supporting documents for LTA claims, as per the Supreme Court decision in Commissioner of Income Tax Vs. Larsen & Toubro Ltd. Therefore, the employer is not liable if the employee submits fake invoices.