Section 10(5) l Passage Money and Leave Travel Concession
Circular No. 211 was issued by the Central Board of Direct Taxes on 26 February 1977. Its subject is Section 10(5) l Passage Money and Leave Travel Concession.
This grants an exemption or a relief under a provision that allows one. Read the conditions attached: an exemption notification is construed strictly, and a condition missed is the exemption lost.
Lays down how to fix an employee's 'home district' for the leave travel concession exemption under section 10(5), the expression being undefined in the Act and the Rules. A place may be accepted as the home district if any one of four things holds: the place declared requires the assessee's physical presence at intervals to discharge domestic or social obligations and he has been visiting it frequently since entering service; or he owns residential property there, or is a member of a joint family owning such property there; or his near relations reside there; or he lived there for some years before entering service. Once the assessee has exercised his option, he will not ordinarily be allowed to change it.
The words 'home district' are not defined in the Income-tax Act or the Rules, and the question of how to fix it for section 10(5) was considered.
SECTION 10(5) l PASSAGE MONEY AND LEAVE TRAVEL CONCESSION
53. Criteria for determining "home district" for the purpose of exemption under clause (5)
1. Section 10(5 ) provides that in the case of an individual being a citizen of India, travel concession or assistance received by or due to an individual from the employer for himself, his spouse and children in connection with his proceeding on leave or on retirement or on termination of service to his "home district" is exempt from income-tax, subject to fulfilment of the conditions laid down in the said section.
2. The words "home district" have not been defined either in the Income-tax Act, or the Income-tax Rules. A question has, therefore, been considered as to how to fix "home district" for the purpose of section 10(5). The following criteria are laid down for determining "home district" for the purpose of section 10(5):
i. the place declared by the assessee is one which requires his physical presence at intervals for discharging various domestic or social obligations and if so, after his entry into service, he had been visiting that place frequently; or
ii. the assessee owns residential property in the place or is a member of the joint family having such a property there; or
iii. his near relations are resident in that place; or
iv. prior to his entry into service, he had been living there for some years.
3. If any of the above conditions is satisfied, the assessee may be allowed to claim a particular place as his "home district", once an assessee has exercised his option in respect of "home district", he will not be ordinarily allowed to change the same.
Circular : No. 211 [F. No. 184/29/76-IT(A-I)], dated 26-2-1977.
When a leave travel concession claim is questioned because the destination is not accepted as the employee's home district.
Source: the Income Tax Department’s own published text — its page for this instrument.