Proof of Leave Travel Allowance : Issued Faced by Employers..

by Mr.T.E. Gautham, CEO, Hinote Systems, Chennai

The law governing tax exemption on LTA (Leave Travel Allowance) is complex to understand & difficult to follow.

Let us take a look at the typical issues employees face while calculating tax exemption on LTA.

1.   When employees travel to multiple destinations, it may not be easy to determine the farthest place by compliance personnel.

  For example, let us assume that an employee who works in a Chennai based company visits many places in Assam &  Meghalaya on leave travel.

It may not be easy for the compliance personnel sitting in Chennai to determine accurately the farthest place. Also, determining the farthest place can be arduous and time consuming if there are many employees who do circuitous leave travel.

  

T.E. Gautham,
CEO, Hinote Systems

2.  When an employee visits places which are not connected by train, employers may find it difficult to get details regarding public transport in the areas visited by the employee in order to calculate tax exemption.

3.  Calculating equivalent First A/C train fare can be time consuming, particularly when an employee travels with his/her family.

  

4.  Many employers pay LTA as a monthly fixed pay & collect travel bills for scrutiny and calculate tax exemption on LTA only towards the end of the year.

If an employee travels in the early part of the year, the First A / C train fare or air fare at the time of travel may not be the same as that towards the end of the year when employers calculate tax exemption.

If there is a change in train fare towards the end of the year, employers may not find it easy to locate the train/air fares which were in effect at the time of the employee’s travel.

The Income Tax Department should consider simplifying the rules governing tax exemption on LTA. Compliance officers in employer organizations currently find it difficult to meet the onerous conditions laid down in this regard. A simpler set of rules will go a long way in enhancing compliance.

About Hinote Systems..

Hinote offers payroll services and software to organizations in India.  The company currently manage payroll for thousands of employees across customer organizations all over India.

Our customer organizations are from sectors such as manufacturing and services including Information Technology (IT), Business Process Outsourcing and the social sector. We have significant expertise in payroll and information technology.

Hinote Systems provides services,  Software Related to Payroll / HR

Email: info@hinote.in, gautham@hinote.in

Web Site: www.hinote.in/blog

1, Venkatarathinam Nagar Extn,

Second Street, Adyar,

Chennai-  600 020

Phone no: +9144 4330 7244

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