Tax Implications of LTC under Different Tax Regimes
This query is : Resolved
25 June 2024
LTC is not taxable under the old tax regime but is taxable under the new tax regime.
An employee adopted the old tax regime in the financial year 2022-23 and took a ₹50,000 advance from his department and availed the LTC. The employee also submitted a claim for the remaining ₹20,000 of LTC to his department in the same financial year.
However, his department processed and paid the remaining ₹20,000 in the next financial year 2023-24. In 2023-24, the employee switched to the new tax regime.
Therefore, will income tax be levied on the ₹70,000 received by the employee?
An employee adopted the old tax regime in the financial year 2022-23 and took a ₹50,000 advance from his department and availed the LTC. The employee also submitted a claim for the remaining ₹20,000 of LTC to his department in the same financial year.
However, his department processed and paid the remaining ₹20,000 in the next financial year 2023-24. In 2023-24, the employee switched to the new tax regime.
Therefore, will income tax be levied on the ₹70,000 received by the employee?
26 June 2024
If the amount was already claimed earlier, it cannot be assessed again.
29 August 2024
Good Luck.
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