Hello,
I have some queries regarding LTA (Leave Travelling Allowance). Does it have any maximum limit? And also who is eligible for LTA? Does LTA differ from company to company?
Also I would like to know about the components for reimbursement that a company can provide to its employees.
kindly help me in this regard.
Regards,
Shweta
From India, Pune
I have some queries regarding LTA (Leave Travelling Allowance). Does it have any maximum limit? And also who is eligible for LTA? Does LTA differ from company to company?
Also I would like to know about the components for reimbursement that a company can provide to its employees.
kindly help me in this regard.
Regards,
Shweta
From India, Pune
Dear Mr. Khola,
Thanks a lot for your reply. There is one more doubt regarding the same. If LTA is not to be paid under any of the statute & management can frame its own policy regarding LTA. Is it possible that management can also deny to provide LTA?
As per my knowledge LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31). So if I have traveled and wish to claim Can I claim? Or is it so that I can claim only if my company has provision for LTA under reimbursement?
Regards,
Shweta
From India, Pune
Thanks a lot for your reply. There is one more doubt regarding the same. If LTA is not to be paid under any of the statute & management can frame its own policy regarding LTA. Is it possible that management can also deny to provide LTA?
As per my knowledge LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31). So if I have traveled and wish to claim Can I claim? Or is it so that I can claim only if my company has provision for LTA under reimbursement?
Regards,
Shweta
From India, Pune
Dear Shewta,
Once management frame any policy for the employees & also declared to effective/ applicable from any specific date then the beneficiaries become entitled to receive this benefit as a term & condition of employment & thereafter employer can not deny it. If the management have not shown this term in the appointment letter & no policy is also there then in that case why the employer will provide this benefit to the employee(s).
Regards,
R.N.Khola
From India, Delhi
363Once management frame any policy for the employees & also declared to effective/ applicable from any specific date then the beneficiaries become entitled to receive this benefit as a term & condition of employment & thereafter employer can not deny it. If the management have not shown this term in the appointment letter & no policy is also there then in that case why the employer will provide this benefit to the employee(s).
Regards,
R.N.Khola
From India, Delhi
Dear All,
As rightly pointed out LTA is not a statutory payment to be made to employees. Generally, companies frame LTA rules as a policy and as per this policy the employee can avail LTA benefits. But there is a legal provision under the IT act. The broad guidelines are
1. Once the LTA is applicable to an employee it becomes exempt from tax if the employee claims it twice in a block of 4 years and the block started if my memory is right from 1998 - 2001, 2002-2005, 2006-2009, 2010-2013 and so on.
2. In the above case for example the employee claims LTA in 2011 & 2013 then it becomes exempt from tax provided he produces evidence for having undertaken the travel.
3. He has to compulsarily be on leave (as he is on LTA tour) during the period of LTA leave. If by chance he reports for work and tries to create an evidence that he was on tour then the LTA paid will be taxable by the employer.
4.Please note that the expenses incurred by the employee will be permitted only to the extent of travel and will not include boarding and lodging.
5. To the best of my knowledge there is no specific definition of family. It can include father, mother, spouse, children etc.,
6. On the other hand the employee can claim LTA amount each year and the same becomes taxable as per IT act.
7. The LTA amount fixation varies from company to company. Some companies fix a adhoc amount and some others link it up either will Basic + DA or Gross salary.
Trust I have clarified the matter to the extent possible.
Regards
M.V.KANNAN
From India, Madras
As rightly pointed out LTA is not a statutory payment to be made to employees. Generally, companies frame LTA rules as a policy and as per this policy the employee can avail LTA benefits. But there is a legal provision under the IT act. The broad guidelines are
1. Once the LTA is applicable to an employee it becomes exempt from tax if the employee claims it twice in a block of 4 years and the block started if my memory is right from 1998 - 2001, 2002-2005, 2006-2009, 2010-2013 and so on.
2. In the above case for example the employee claims LTA in 2011 & 2013 then it becomes exempt from tax provided he produces evidence for having undertaken the travel.
3. He has to compulsarily be on leave (as he is on LTA tour) during the period of LTA leave. If by chance he reports for work and tries to create an evidence that he was on tour then the LTA paid will be taxable by the employer.
4.Please note that the expenses incurred by the employee will be permitted only to the extent of travel and will not include boarding and lodging.
5. To the best of my knowledge there is no specific definition of family. It can include father, mother, spouse, children etc.,
6. On the other hand the employee can claim LTA amount each year and the same becomes taxable as per IT act.
7. The LTA amount fixation varies from company to company. Some companies fix a adhoc amount and some others link it up either will Basic + DA or Gross salary.
Trust I have clarified the matter to the extent possible.
Regards
M.V.KANNAN
From India, Madras
The employer draws benefit from paying the LTC to its employees. One, the leave at the credit of am employee is consumed. Two, The leave cost the employer at the present rate of salary. Three, employee is happy that employer has arranged for his & his family's recreation/welfare. Four, employer gets the Income Tax benefit. Five, It adds to the brand of the company - The employment in that organization become more premium. Six, the mind of the employees remain proactive and they do not indulge in unwanted activities. Seven, The tours and travel industry flourishes and it adds to the GDP of the country. There are many other direct and indirect benefits. LTC/A is a win win proposition for the employers.
From India, Chandigarh
From India, Chandigarh
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LTA (REDIFF).doc