Answers from the experts

I work with an IT firm and my salary is Rs 4 lakh per annum. I get Rs 15,000 as leave travel assistance (LTA). I was told that this is tax-exempt if I spend the money while on leave.


The LTA is exempt from tax twice in a block of four calendar years (January-December , currently the block is 2006-2009 ) based on the actual amount spent on traveling, say experts at Astute Consulting.

The exemption is subject to expenses actually incurred towards travel in India for: economy fare of the national airlines by the shortest route to the place of destination; airconditioned first class rail fare by the shortest route to the place of destination; first class or the deluxe class fare by any other recognised public transport ; and where a recognised public transport system does not exist, the air-conditioned first class rail fare for the distance of the journey by the shortest route, as if the journey has been performed by rail, will be considered.

I was working with an investment bank and have now started my business and will be recruiting a team of five to seven people in a rented office. I do not expect to break even till a year and there will be a business loss for this year. Can I set off this loss against my salary income up to September 2008 and claim refund of TDS deducted by the bank?


According to experts at Astute Consulting, a loss from business and profession cannot be set off against income under the head ���salaries��� . However, you can carry forward the unabsorbed depreciation and business loss for the setoff against profits in subsequent years.

I sold some property which I was holding for about 10 years and earned a capital gain of Rs 75 lakh. I wish to invest the sum in companies like IRB and GMR to save the capital gain tax. How much can I invest?


As per the provisions of Section 54EC of the Income Tax Act, 1961, long-term capital gain can be saved if within six months from the date of transfer of property, the capital gains are invested for a period of three years in specific bonds of National Highways Authority of India or Rural Electrification Corporation up to a maximum of Rs 50 lakh. As such, experts at Astute Consulting observe that for the purpose of claiming exemption, you will not be able to invest in the companies you have mentioned.