A division bench of the Supreme Court headed by Chief Justice Uday Umesh Lalit has said that Leave Travel Allowance (LTA) can be used only for traveling within India.
New Delhi. A division bench of the Supreme Court headed by Chief Justice Uday Umesh Lalit has said that Leave Travel Allowance (LTA) can be used only for traveling within India. The Supreme Court said that it is not applicable to travel abroad. The top court has delivered a significant ruling against state-run State Bank of India (SBI) that TDS will be levied on LTA for foreign travel of employees as Leave Travel Concession (LTC) is allowed for travel within the country.
The court dismissed the appeal filed by SBI against the decision of the Delhi High Court, which held that SBI employees cannot get exemption on the amount received under LTA claim, as these people have traveled abroad. Was.
Get the benefit of tax exemption
Chief Justice Uday Umesh Lalit, Justice S Ravindra Bhatt and Justice Sudhanshu Dhulia held that according to the rules of LTA, an employee gets the benefit of tax exemption for traveling between two cities within the country itself. The Supreme Court said that if the employees travel outside the country, that is, abroad. So they will not get the benefit of LTA under the provision of section 10(5) of the Income Tax Act.
Exemption is available in this rule
The Income Tax Act, 1961 provides various exemptions to the salaried class. One of such exemptions available to the salaried class under the law and widely used by employers is Leave Travel Allowance (LTA) / Leave Travel Concession (LTC).
What is Leave Travel Allowance (LTA)?
LTA is a type of allowance which is given by the employer to the employee for traveling. When he is on leave from work and traveling within the country. Companies give Leave Travel Allowance (LTA) to their employees for going on holidays. The amount of LTA fixed for you can be obtained by showing the cost of this journey. The government also gives tax exemption on the money spent in the form of LTA.
Dismissing the case, the judge said that it is in the public interest to follow the policy of the central government with regard to LTC to be given to the officers of public sector banks.
