The employer will allow the deduction/ exemption only if proofs are furnished by the employee.
I work in the private sector and get LTA. Do I have to submit travel bills to claim my LTA. As I do not have the bills, do I have to pay tax on the amount?
– Raman Kumar
Yes, as per recent amendments to the Finance Act, the evidence/ proof/ particulars of the deductions/ exemptions/ allowances claimed by the employee such as rent receipt for claiming HRA, bills of travel for claiming LTA should be furnished by the employee to the employer. The employer will allow the deduction/ exemption only if proofs are furnished by the employee. Hence, you will not be entitled to claim LTA without furnishing documentary evidence.
We recently sold our house for Rs 32 lakh which was in my wife’s name. She does not have any income and is a housewife. What will be the tax obligation on her part?
Whenever a property is sold in India, the seller makes a capital gain, which is taxed as income in his/ her hands irrespective of whether he has any other source of income or not. In order to reduce the tax burden, the amount of capital gains may be reinvested in specific assets or schemes within the prescribed time limit. For example, one may, within a period of one year before or two years after the date of sale of house property, invest the capital gains to purchase, or within a period of three years after that date construct, one residential house in India to reduce the tax burden. The capital gains may even be invested in the prescribed bonds within a prescribed period to reduce tax outgo. If the amount is not invested up to the date of submission of return of income, then the tax payers should deposit the money in Capital Gain Account Scheme (CGAS) with a nationalised bank. The proof of deposit should be submitted along with return of income. On the basis of actual investment and the amount deposited in the deposit account, exemption will be given to the taxpayer.
In case the amount is not so invested in notified schemes/ assets then the differential between the sale price of the house property and the initial purchase price, cost of renovation and the transfer costs, will be taxed as income under head capital gains in the year in which the house property was sold. Thus, instead of keeping the money in the bank, your wife has to keep the amount in a nationalised bank under the CGAS till the time she doesn’t invest the capital gain amount. More so, at the date of filing the tax return after the date of sale, the money can be kept in CGAS.
The writer is partner, Nangia & Co LLP. Send your queries to