LTC is exempt from tax only when employee has utilized LTC for travel within India. Nothing in Rule 2B provides assessee with a liberty to claim exemption where part of his package is spent on his overseas travel and part of his journey has been performed within India
In the instant case, the assessee had claimed exemption of LTC received from his employer under section 10(5) of the IT Act. The AO disallowed the LTC exemption claimed by assessee after noticing that leave travel package covered Singapore and Malaysia also, on the footing that section 10(5) doesn’t allow exemption for overseas travel. Further, the CIT(A) upheld the order of AO. Aggrieved assessee filed the instant appeal to Tribunal.
The Tribunal held in favour of revenue as under:
1) The provisions of the Act are in relation to LTC for proceeding on leave to any place in India;
2) LTC is exempt from tax only when employee has utilized LTC for travel within India;
3) Nothing in Rule 2B provides assessee with at liberty to claim exemption where part of his package is spent on his overseas travel and part of his journey has been performed within India. Thus, assessee’s exemption claim under section 10(5) was rejected - OM PARKASH GUPTA V. ITO [2013] 33 taxmann.com 169 (Chandigarh - Trib.)
In the instant case, the assessee had claimed exemption of LTC received from his employer under section 10(5) of the IT Act. The AO disallowed the LTC exemption claimed by assessee after noticing that leave travel package covered Singapore and Malaysia also, on the footing that section 10(5) doesn’t allow exemption for overseas travel. Further, the CIT(A) upheld the order of AO. Aggrieved assessee filed the instant appeal to Tribunal.
The Tribunal held in favour of revenue as under:
1) The provisions of the Act are in relation to LTC for proceeding on leave to any place in India;
2) LTC is exempt from tax only when employee has utilized LTC for travel within India;
3) Nothing in Rule 2B provides assessee with at liberty to claim exemption where part of his package is spent on his overseas travel and part of his journey has been performed within India. Thus, assessee’s exemption claim under section 10(5) was rejected - OM PARKASH GUPTA V. ITO [2013] 33 taxmann.com 169 (Chandigarh - Trib.)
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