CBDT has allowed for Claiming LTC by way of expenses incurred and given brief conditions for eligibility, Can an Assessee claim such LTC during Filing his IT Return or he has to submit to his Employer for claiming!
Answer: Tushant May 31, 2021 Answer:
Leave Travel Concession (LTC) is an exemption for allowance/assistance received by the employee from his employer for travelling on leave for a trip made within India for the taxpayer and his/her family under Section 10(5).
However, owing to the COVID19 pandemic, people could not travel and hence the employees would have to pay tax on the LTA component of the salary.
In order to help the salaried individuals claim the exemption as well as to boost the selling of commodities and services, the government announced the LTA cash voucher scheme in lieu of the LTA exemption (Notification No. 50/2021 dated 05/05/2021).
The major conditions for availing benefits under LTA cash voucher scheme are:
The LTA scheme was initially introduced only for the central government and PSU employees. However, the finance minister later extended this scheme to non-central government employees as well.
In order to claim the above exemption, employee may intimate his employer about the details of specified expenditures along with supporting vouchers. The employer will accordingly deduct lower TDS after considering this exemption.
However, if the employee does not intimate the employer, he/she can claim the exemption at the time of filing of Income Tax Return (ITR) provided all the specified conditions are fulfilled to claim the exemption.
It may be pertinent to note that the taxpayers opting for the ‘New Tax regime’ will not be able to claim the exemption under the LTA cash voucher scheme.
