LTA

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 January 2011 Dear All

Pls let me know Is there is any circular/judgment mentioning up to certain limit, employer need not collect the LTA bill and that is exempt even though bills not submitted.

Also what is block period of 4 years for LTA exemption. Block period consider employer to employer basis or any specified rule for that ?

Thanks

chetan soni

chetan soni (Expert)
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19 January 2011 There is no circular on this, but yes last year there was one judgement for non collection of LTA bills but the corrosponding amendment is not done in income tax rules, hence go with income tax rules.

Also note the current block is 2010, 2011, 2012 & 2013.

There is no employer to employer basis, it is specified in income tax rules.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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19 January 2011 This is not covered in any circular, but there is one supreme court judgement

Employers, while processing the conveyance and leave & travel allowance (LTA) claims of their staff, are under no statutory obligation to collect supporting evidence and furnish them to tax authorities, the Supreme Court said on Jan 21, 2009.
A bench comprising Justice SH Kapadia and Justice Aftab Alam said that assessee employers are under no statutory obligation to collect bills and details to prove that the employees had utilised the amounts obtained against these claims on travel and related expenses.
Case Details
CIVIL APPEAL NO.993 OF 2005 / WITH NO. 992 OF 2005
COMMISSIONER OF INCOME TAX & ANR. V/s LARSEN & TOUBRO LTD

Block period is LTA duration is 4 years current block is 2010-2013 during this block any time but not more then 2 times you can claim LTA

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Querist : Anonymous

Querist : Anonymous (Querist)

22 January 2011 Thanks for the Reply

I have left with one query.

For TDS and Form 16 purpose what is the role of employer . he can consider the exemption ( 4 year block)only on the basis of bills submission by employee or just declaration from employee is enough for TDS.

and also how the block is calculated ?.eg 2010 is one block but when it is considered ? from April 10 to March 11 or form jan -10 to dec-10

Thanks

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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03 August 2024 For TDS (Tax Deducted at Source) and Form 16 purposes, the role of the employer in relation to exemptions, such as those under the Leave Travel Allowance (LTA) or other exemptions, is significant. Here’s a detailed overview:

### **Role of Employer for TDS and Form 16:**

1. **Verification of Claims:**
- **LTA Exemption:** The employer is responsible for ensuring that the claims for exemptions, such as LTA, are valid. The exemption is usually based on the employee's declarations and supporting documents.
- **Supporting Documents:** Employers typically require employees to submit travel bills, tickets, boarding passes, and other relevant documentation to substantiate the claim for LTA exemption. A mere declaration from the employee may not be sufficient without supporting evidence.

2. **Calculation of TDS:**
- **Consideration of Exemptions:** The employer calculates TDS after considering eligible exemptions and deductions. For LTA, the employer will deduct tax on the amount not covered by the exemption, provided the employee has submitted valid proof of travel.
- **Form 16:** The employer issues Form 16, which details the TDS deducted and provides a summary of the income and exemptions. It is important for the employee to ensure that the information provided is accurate and supported by appropriate documentation.

### **Calculation of Block for LTA Exemption:**

1. **4-Year Block for LTA:**
- **Definition:** The LTA exemption is available for travel within a 4-year block period. The block period is defined by the Income Tax Act, which specifies a 4-year period during which you can claim LTA exemptions.
- **Block Calculation:**
- **Current Block:** The current block is from January 2022 to December 2025 (for the block period 2022-2025).
- **Previous Block:** The previous block was from January 2018 to December 2021.

2. **Example Block Calculation:**
- **Block Period:** If you traveled in 2010, it would fall within the block period from January 2010 to December 2013.
- **Block Consideration:** For LTA claims, you should ensure the travel occurs within the current block period. Claims made outside the block period will not be eligible for exemption.

3. **Claiming LTA:**
- **Proof Submission:** To claim LTA for travel within the block, submit the travel documents to your employer for verification. The employer will then account for these claims while calculating the TDS and issuing Form 16.

### **Summary:**

- **For TDS Purposes:** The employer must verify claims for exemptions like LTA based on supporting documents provided by the employee, not just a declaration.
- **Block Calculation:** The 4-year block for LTA is considered from January to December of a 4-year period, and claims must fall within the defined block period.

For accurate advice tailored to your specific situation, especially in relation to the current block or any new changes in tax laws, consulting with a tax advisor or HR professional is recommended.