Foreign Travel not covered u/s. 10(5) hence TDS deductible on same u/s 192(1)

State Bank of India Vs ACIT (Supreme Court of India)

Supreme Court held that travel with a foreign leg is not covered under the provisions of section 10(5) of the Income Tax Act. Accordingly, TDS deductible on the same under section 192(1) of the Income Tax Act.

Travel foreign leg covered u/s. 10(5)  TDS deductible same u/s 192(1)

Facts- The question which has fallen for our consideration is whether the appellant was in default for not deducting tax at source while releasing payments to its employees as Leave Travel Concession (LTC).

Conclusion- LTC is for travel within India, from one place in India to another place in India. There should be no ambiguity on this. It has already been clarified that in view of the provisions of the Act, the moment employees undertake travel with a foreign leg, it is not a travel within India and hence not covered under the provisions of Section 10(5) of the Act.

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