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A few summers ago, Rohit planned what most Indian families do every year…a modest holiday to see relatives and escape the heat. Tickets were booked. Leave was applied for. Then work happened. A project deadline shifted. The children’s school vacation didn’t. The family travelled first. The employee followed a few days later. The holiday was delightful, until payroll raised an eyebrow: “LTA exemption not admissible — family travelled separately.” A seemingly mundane question now exposed a deeper interpretational issue: Does the Income-tax Act really require families to travel together for LTA exemption? What the Law Actually Says (and Doesn’t Say) Leave Travel Allowance exemption flows from section 10(5) of the Income-tax Act, read with Rule 2B of the Income-tax Rules. The provision is unromantic and precise. It talks about: travel by the employee and his family, journeys within India, limits on number of trips, and fare restrictions based on the shortest route. What it never says is equally important: no requirement of simultaneous travel, no requirement of common dates, no requirement that the employee be physically present on every leg of the family’s journey. Courts have repeatedly emphasized that conditions not in the statute cannot be imported into an exemption (CIT v. Gwalior Rayon Silk Mfg. Co. Ltd., CIT v. Tara Agencies). Yet, practice had other ideas. How One Circular Changed Everything In 2012, the CBDT issued Circular No. 8/2012, which, while explaining LTA provisions, stated that the exemption would not be available where family members travelled separately without the employee being on leave. That line, never found in the Act or Rules, began to dominate LTA administration. Payroll systems absorbed it. HR manuals canonised it. What began as an explanation hardened into a rule. This was ironic, because courts have consistently held that circulars cannot override or narrow the scope of the statute (UCO Bank v. CIT, Azadi Bachao Andolan). But in practice, the 2012 interpretation prevailed. Decades later came CBDT Circular No. 24/2022, which was updated and comprehensive guidance for deduction of tax at source from salary, and therein the 2012 restriction was conspicuously absent. No reaffirmation. No footnote. No warning that the old position still applied. In administrative law, omission in a later, exhaustive circular is rarely accidental. Courts have long recognised that when an authority consciously drops a condition, the earlier interpretation loses force (Paper Products Ltd. v. CCE; Ratan Melting & Wire Industries). The law quietly returned to what the statute had always said. Government LTC Jurisprudence: The Missing Context An often-overlooked aspect of section 10(5) is its legislative ancestry. The provision was framed with reference to Government Leave Travel Concession (LTC) rules, a fact repeatedly acknowledged in administrative and judicial discourse. The Department of Personnel & Training (DoPT), which governs Leave Travel Concession (LTC) for government employees, has categorically clarified that family members may travel separately or in different groups at different times to different destinations, without affecting LTC entitlement. This matters because: Section 10(5) was historically framed with Government LTC rules as its reference point, and Courts have repeatedly relied on service jurisprudence to interpret tax travel concessions. Where the very policy framework that inspired section 10(5) accepts separate travel as permissible, insisting on “together travel” for tax purposes begins to look less like interpretation and more like invention. So Where Does That Leave Us? When all strands are read together: the statute imposes no simultaneity condition, the rules are silent on timing, the 2012 circular added a non-statutory restriction, the 2022 circular consciously abandoned it, and the DoPT’s authoritative clarification openly permits separate travel, the conclusion is clear: LTA exemption cannot be denied merely because the employee and family travelled separately, so long as the travel is genuine and Rule 2B conditions are satisfied. Income Tax Act 2025: Does It Changes Anything There is one point that deserves explicit clarification. Despite the introduction of the new Income Tax Act, 2025, which is scheduled to come into force from 1 April 2026, nothing changes on this issue. The exemption in Section 10(5) of 1961 Act has moved verbatim to Schedule III (Serial no. 8) of the 2025 Act. The rules under new Act are yet to notified but are not expected to be radically different from existing Rule 2B. A Final Thought This issue illustrates a familiar theme in tax administration: how explanatory circulars, when uncritically applied, can distort the statute they seek to explain. The resolution here does not require a liberal interpretation, but merely a faithful one. When Parliament has chosen not to legislate a condition, and the executive has chosen not to reiterate it, insistence on that condition tells us more about institutional inertia than legislative intent. Tax law should reflect real-life patterns rather than rigid administrative convenience. Families do not always move in lockstep; deadlines shift; schools reopen. Exemption provisions should accommodate that reality. And sometimes, the most meaningful clarification is the one that quietly disappears. Disclaimer This article presents a reasoned interpretation based on current statutes, rules, CBDT circulars, and DoPT LTC guidelines. There is no binding judicial precedent directly on point, and the 2012 circular, while historically cited, has been superseded by Circular 24/2022. Readers and practitioners should treat this as the better and legally sustainable view, not as absolute legal advice, and assess circumstances on a case-by-case basis.

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