I couldn’t submit the related paperwork for availing LTC in time and subsequently the employer will deal with this allowance as taxable for the restricted function of tax deduction and deduct tax on it.
Trupty Nayak
Answer: Exemption for sure allowances like Leave Travel Concession (LTC) and House Rent Allowance (HRA) is obtainable to an worker provided that the worker incurs the related expenditure. It is the duty of the employer to deduct acceptable quantity of tax whereas paying the wage to the worker.
While figuring out the tax legal responsibility of an worker, the employer is required to keep in mind all of the exemption and deduction which an worker is entitled to, based mostly on the paperwork submitted by the employer. So in case an worker fails to submit the related paperwork or the employer fails to keep in mind the paperwork submitted by the worker and deducts tax, he/she will be able to nonetheless declare tax profit whereas submitting ITR.
Whether an allowance is exempt or not isn’t depending on the motion of the employer however relies on whether or not the worker has incurred the related expenditure. The position of an employer is to deduct the suitable tax and which isn’t the identical as deciding whether or not a specific allowance is taxable or exempt within the palms of the worker.
Since you may not submit the related paperwork in time and subsequently the employer will deal with this allowance as taxable for the restricted function of tax deduction and deduct tax on it. As you’ve already incurred the eligible expenditure to assert the exemption of LTC, it’s open to you to assert the LTC as exempt whereas submitting your ITR and declare refund of extra tax deducted. Please be aware that you could be get a discover from the earnings tax division asking you to clarify the discrepancy between taxable wage as reported by your employer and as claimed by in your ITR. So please protect the related paperwork in an effort to clarify the explanation for the distinction.
Balwant Jain is a tax and funding knowledgeable
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