06 January 2013
my qs. is under the followimg situation what type of action is to be taken by a CA? An employee gets LTC in the F.Y 2011 but utilzes it in 2012 i.e he goes on a holiday in 2012. when is he supposed to get the exemption ? in 2011 or in 2012 acc to prov of sec 10? sec 10 when read seems to be self contradictory.... what should be a CAs advice in this?
07 January 2013
Priyanka, Refer to Rule 2B which states that the exemption is admissible in respect of actual expenditure incurred for journeys performed. The basic rule is that the quantum of exemption will be limited to the actual expenses incurred on the journey. This pre-supposes that, without performing any journey and incurring expenses thereon, no exemption can be claimed. The exemption can only be availed twice in a block of 4 CALENDAR years. For the periods mentioned by you the relevant calendar year block is 2010-2013. You have mentioned that the employee has taken the concession in FY 2011. if it is FY 2011-12 and the journey is undertaken in FY 2012-13, then the employee wont get the exemption. Whereas, if he has availed in Calendar year 2011, but undertakes journey in Caledar year 2012, but before March 12, he will still get the exemption.
CAclubindia
