Dear All, I am handling Comp. & Ben for my organization. I want to seek advice from you all regarding the LTA limit. What I know the general trend is to give One Month's Basic as LTA but my worry is that for Top Mgt., if they are entitled to 1 month's basic, how realistic is it for them to claim it as per IT rule, they will claim it once in 2 years so eg. if they are entitled to 1 lakh per annum, Is it realistic for them to claim 2 lakhs as LTA?
Should we have one month Basic or lower the amount. What is a good practice? Looking for your views and what are you practicing in your organization.
From India, New Delhi
5Should we have one month Basic or lower the amount. What is a good practice? Looking for your views and what are you practicing in your organization.
From India, New Delhi
Hi,
To the best of my knowledge, there is no upper limit on LTA that a company can designate or disburse.
However, as per the IT rules:
1) an employee can claim LTA for self and dependent family members once in two years with the necessary supporting and the same will be non-taxable
2) an employee and his family will have to travel within the country only
3) the employee and his dependent family members can produce / even fly by economy class
Anything over and above the amount supported, would be considered as a taxable income.
regards, hrp
From India, Mumbai
To the best of my knowledge, there is no upper limit on LTA that a company can designate or disburse.
However, as per the IT rules:
1) an employee can claim LTA for self and dependent family members once in two years with the necessary supporting and the same will be non-taxable
2) an employee and his family will have to travel within the country only
3) the employee and his dependent family members can produce / even fly by economy class
Anything over and above the amount supported, would be considered as a taxable income.
regards, hrp
From India, Mumbai
Hi,
As per my knowledge there is no limit for LTA, as per the IT Rules an employee can get the LTA benefit for self and dependents of his family members two journeys in 4 financial years in subject to actual on economy class against subsequent supporting documents.
Thanks & Regards,
Harish Kumar.K.S
Mob: 9986839169
From India, Bangalore
As per my knowledge there is no limit for LTA, as per the IT Rules an employee can get the LTA benefit for self and dependents of his family members two journeys in 4 financial years in subject to actual on economy class against subsequent supporting documents.
Thanks & Regards,
Harish Kumar.K.S
Mob: 9986839169
From India, Bangalore
Minimum Limit is for LTA is 8.33% of Basic Salary of an employee per month and same will be calculated for the enitre period.
There is no maximum limit defined regarding this.
There is a block period of 04 years and any employee can claim maximum two times LTA in the block period of 04 years.
If any employees claim more than two times it will be taxable ; provided that employee comes under the limit of tax limit.
For claim the LTA employee has need to produce the journey proof as per travel.
An employee can claim LTA without any supporting but it will be taxable.
For more please feel free to contact me.
Rakesh Kashyap
There is no maximum limit defined regarding this.
There is a block period of 04 years and any employee can claim maximum two times LTA in the block period of 04 years.
If any employees claim more than two times it will be taxable ; provided that employee comes under the limit of tax limit.
For claim the LTA employee has need to produce the journey proof as per travel.
An employee can claim LTA without any supporting but it will be taxable.
For more please feel free to contact me.
Rakesh Kashyap
Dear Shilpi,
There is no upper limit for giving the perquisites as LTA to an employee. You can even give Rs 5.0 lakhs as LTA. But as per IT rule, Rs 15,000/- is allowed for exemption under IT Act. Over and above the same, it will be taxable. There is a block period of 04 years and any employee can claim maximum two times LTA in the block period of 04 years. Please check with you taxation Department, which your organisation might have already opted for the same regarding block year.
From India, Pune
There is no upper limit for giving the perquisites as LTA to an employee. You can even give Rs 5.0 lakhs as LTA. But as per IT rule, Rs 15,000/- is allowed for exemption under IT Act. Over and above the same, it will be taxable. There is a block period of 04 years and any employee can claim maximum two times LTA in the block period of 04 years. Please check with you taxation Department, which your organisation might have already opted for the same regarding block year.
From India, Pune
Hi Shilpi,
As per my understanding some companies give 1 month basic salary under LTA, some uses 1-10% of CTC and some companies provide a cap of 75000/- or 100000(depend on the CTC of an employee)/-.
In your case you are carried forward the previous year LTA to current year and providing the benefit. There is no rule for maximum limit. If an employee provide the bill with valid supporting and rule , then he is eligible to avail the benefit.
Regards
Siji
From India, Mumbai
As per my understanding some companies give 1 month basic salary under LTA, some uses 1-10% of CTC and some companies provide a cap of 75000/- or 100000(depend on the CTC of an employee)/-.
In your case you are carried forward the previous year LTA to current year and providing the benefit. There is no rule for maximum limit. If an employee provide the bill with valid supporting and rule , then he is eligible to avail the benefit.
Regards
Siji
From India, Mumbai
Dear All,
Thanks for your responses, My worry is that if I give 1 month LTA to Sr.Mgt.Employee, which will be approx.1 Lakh what is the use as anyways he wont be able to claim 2Lakhs for any journey in India even if he fly from J&K to Kanyakumari.
And anyways if remaining amount will be taxable then why not to give in any other component why LTA....?
So do you think I should give LTA which is on realistic side to claim.
Regards,
Shilpi
From India, New Delhi
Thanks for your responses, My worry is that if I give 1 month LTA to Sr.Mgt.Employee, which will be approx.1 Lakh what is the use as anyways he wont be able to claim 2Lakhs for any journey in India even if he fly from J&K to Kanyakumari.
And anyways if remaining amount will be taxable then why not to give in any other component why LTA....?
So do you think I should give LTA which is on realistic side to claim.
Regards,
Shilpi
From India, New Delhi
Hi Shilpi,
In this case you have following payment options
1. No carried forward LTA for the succeeding year. Whatever the accural amount pay it in the same year itself. It will be definitely taxable.
2. Keep a cap say 50000/- or 75000/- for avoiding huge tax deduction.
You can give options to the employees ie if they wish to select LTA or not? If yes you can give options like 1% -10% of CTC( if your company policy allows this).
If no, then give under other reimbursement heads.
Regards
Siji
From India, Mumbai
In this case you have following payment options
1. No carried forward LTA for the succeeding year. Whatever the accural amount pay it in the same year itself. It will be definitely taxable.
2. Keep a cap say 50000/- or 75000/- for avoiding huge tax deduction.
You can give options to the employees ie if they wish to select LTA or not? If yes you can give options like 1% -10% of CTC( if your company policy allows this).
If no, then give under other reimbursement heads.
Regards
Siji
From India, Mumbai
Dear Mr. Harish,
I am sorry to correct you. It is not Financial Year, is is Calender Year. It is not 4 finanical years. It is block of 4 years as declared by Central Govt./I.T. Department. Only travel bills can be accepted and lodging/boarding bills.
Sathish
From India, Jaipur
I am sorry to correct you. It is not Financial Year, is is Calender Year. It is not 4 finanical years. It is block of 4 years as declared by Central Govt./I.T. Department. Only travel bills can be accepted and lodging/boarding bills.
Sathish
From India, Jaipur
Dear Shilpi,
Which component about you talking all components are taxable except conveyance and Medical reimbursement and that also have Limit.
For higher salary employees you suppose to give them LTA as one month basic. There is no tax limit for the LTA only need to provide the declaration even not details of bills as per IT act. IT also not saying to collect agreement to claim HRA only declartion required that you are paying some amt as rent. Kindly gothrough with TAXMAN book to get all knowledge for all taxable information related with salary.
Regards,
AKD
From India, Mumbai
Which component about you talking all components are taxable except conveyance and Medical reimbursement and that also have Limit.
For higher salary employees you suppose to give them LTA as one month basic. There is no tax limit for the LTA only need to provide the declaration even not details of bills as per IT act. IT also not saying to collect agreement to claim HRA only declartion required that you are paying some amt as rent. Kindly gothrough with TAXMAN book to get all knowledge for all taxable information related with salary.
Regards,
AKD
From India, Mumbai
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