Whether Leave travel allowance is a taxable allowance or whether it is a perquisite as leave travel concession and exempt.
CA PRAMESH AGARWAL (Profession) (152 Points)
06 August 2009Whether Leave travel allowance is a taxable allowance or whether it is a perquisite as leave travel concession and exempt.
You can receive LTA as either reimbursement or allowance.
Reimbursement
In case of LTA as reimbursement, it is not taxable.
Let's say your company offers an LTA of Rs 50,000. For proof of travel, you produce an air ticket of Rs 10,000.
In such a case, you can claim only Rs 10,000 as LTA and it will be exempt from tax.
Allowance
If you do not submit any proof of travel, you will get your LTA but will have to pay tax on it.
If you produce proof of travel, it will not be taxable to the extent your proof of travel is covered.
Let's say you are entitled to Rs 50,000 as LTA as part of your salary. Since you produced proof of travel as Rs 10,000, you will not be taxed on this amount. However you will be taxed on the net Rs 40,000 as per your income tax slab rate.
LTA is not a fringe benefit as the latter are benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.
Refer Section
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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