Hi,
I have serious doubts on the LTA. I got an offer from one big company and in the offer letter they mentioned the below details,
Fixed salary is breakup into 50% and 50% first 50% is fully taxable and remaining is flexible.
In flexible they have medical expenses, food coupons, House rent allowance, travel expenses and also LTA.
I'm cleared about all other things except LTA. they mentioned it as a part of salary breakup so will I get the LTA amount monthy?
They mentioned we can make LTA upto 1 lakh per annum. What will happen if i did not take up LTA and accept the 1 lakh per annum/12 amount as my monthly income which is taxable?
Kindly advise.
Thanks
Shiva
From India, Hyderabad
I have serious doubts on the LTA. I got an offer from one big company and in the offer letter they mentioned the below details,
Fixed salary is breakup into 50% and 50% first 50% is fully taxable and remaining is flexible.
In flexible they have medical expenses, food coupons, House rent allowance, travel expenses and also LTA.
I'm cleared about all other things except LTA. they mentioned it as a part of salary breakup so will I get the LTA amount monthy?
They mentioned we can make LTA upto 1 lakh per annum. What will happen if i did not take up LTA and accept the 1 lakh per annum/12 amount as my monthly income which is taxable?
Kindly advise.
Thanks
Shiva
From India, Hyderabad
Shiva,
Let me succintly put it.
Your CTC is split into Base Pay & Flexible pay. While base pay attracts PF & Gratuity deductions, flexi pay has to be opted by you. It is suggested to request the following components in the flexi pay.
1. Conveyance Allowance - Rs.800/- P.m. (no proof is required, fully tax exempted)
2.Medical Assistance - Rs.1250/-p.m (tax exempted subject to production of bills)
3.Children Edu Allowance - Rs.100/- per child /month (max 2 children) - Tax exempted (bills to be produced)
4. LTA - If you opt for LTA, it is tax exempted twice in a block years of 4 yrs. You have to avail min 6 days PL and produce the train/air tkts for self and dependents for claiming tax benefit. If you are not undertaking the travel, the LTA amount will be paid to you at the end of the year and the amount thus received will be treated as taxable income. LTA is not paid on monthly basis.
5.50% of basic can be claimed as HRA (for metros) or 40% of basic (for non-metros) for claiming tax benefit.
If you still have doubt, revert.
Ponraj
From India, Lucknow
604Let me succintly put it.
Your CTC is split into Base Pay & Flexible pay. While base pay attracts PF & Gratuity deductions, flexi pay has to be opted by you. It is suggested to request the following components in the flexi pay.
1. Conveyance Allowance - Rs.800/- P.m. (no proof is required, fully tax exempted)
2.Medical Assistance - Rs.1250/-p.m (tax exempted subject to production of bills)
3.Children Edu Allowance - Rs.100/- per child /month (max 2 children) - Tax exempted (bills to be produced)
4. LTA - If you opt for LTA, it is tax exempted twice in a block years of 4 yrs. You have to avail min 6 days PL and produce the train/air tkts for self and dependents for claiming tax benefit. If you are not undertaking the travel, the LTA amount will be paid to you at the end of the year and the amount thus received will be treated as taxable income. LTA is not paid on monthly basis.
5.50% of basic can be claimed as HRA (for metros) or 40% of basic (for non-metros) for claiming tax benefit.
If you still have doubt, revert.
Ponraj
From India, Lucknow
DearShiva,
You can get LTA only if you have applied for leave from your company and have actually travelled. However, international travel is not valid.
Only the travel costs are covered. So, whether you fly, hop on to a train or take public transport, you will have to show the ticket to claim your LTA.
LTA covers travel for yourself and your family. Family, in this case, includes yourself, parents, siblings dependent on you, spouse (even if your spouse is working) and children.
You can claim the LTA benefit just once in a year.
If you switch jobs, you can get the LTA not only from your present organisation but also from your former employer, if the concession is lying unutilized.
You must take the shortest route to your destination to be eligible for LTA.
If your LTA is not utilized, it gets added to your salary and you will be taxed on it.
Hope this may clear your query.
From India, Bhubaneswar
You can get LTA only if you have applied for leave from your company and have actually travelled. However, international travel is not valid.
Only the travel costs are covered. So, whether you fly, hop on to a train or take public transport, you will have to show the ticket to claim your LTA.
LTA covers travel for yourself and your family. Family, in this case, includes yourself, parents, siblings dependent on you, spouse (even if your spouse is working) and children.
You can claim the LTA benefit just once in a year.
If you switch jobs, you can get the LTA not only from your present organisation but also from your former employer, if the concession is lying unutilized.
You must take the shortest route to your destination to be eligible for LTA.
If your LTA is not utilized, it gets added to your salary and you will be taxed on it.
Hope this may clear your query.
From India, Bhubaneswar
Dear Ponraj,
Thanks for the detailed information. I understand about various flexible plans.
So I can add my own plans for 50% of flexible salary right but with some restrictions of maximum amount like HRA, Medical e.t.c?
On LTA they mentioned upto 1 lakh rs per annum. But I dont want any LTA and would like to get the amount monthly and even ready to pay tax for the same.
Is it possible to leave the LTA completely and get the salary monthly? or else how much minimum LTA i can add to my flexible plan?
Thanks
Shiva
From India, Hyderabad
Thanks for the detailed information. I understand about various flexible plans.
So I can add my own plans for 50% of flexible salary right but with some restrictions of maximum amount like HRA, Medical e.t.c?
On LTA they mentioned upto 1 lakh rs per annum. But I dont want any LTA and would like to get the amount monthly and even ready to pay tax for the same.
Is it possible to leave the LTA completely and get the salary monthly? or else how much minimum LTA i can add to my flexible plan?
Thanks
Shiva
From India, Hyderabad
Dear Pon,
Thanks a Lot. But I do have travel expense separately of 9600 which is fixed. So the LTA amount will add to flexible allowance, thats what you are mentioned right?
Now I have to see how to reduce my tax. Can we exclude HRA, Travel expense, food coupons completely from total fixed amount?
If my fixed amount is 7.5 lakh how much tax i need to pay after HRA, travel expenses and food coupons of 15000rs per annum.
Just provide some insight into the tax i need to pay per month.
Sorry to disturb you again, I'm just new to these tax issues.
Thanks
Shiva
From India, Hyderabad
Thanks a Lot. But I do have travel expense separately of 9600 which is fixed. So the LTA amount will add to flexible allowance, thats what you are mentioned right?
Now I have to see how to reduce my tax. Can we exclude HRA, Travel expense, food coupons completely from total fixed amount?
If my fixed amount is 7.5 lakh how much tax i need to pay after HRA, travel expenses and food coupons of 15000rs per annum.
Just provide some insight into the tax i need to pay per month.
Sorry to disturb you again, I'm just new to these tax issues.
Thanks
Shiva
From India, Hyderabad
Shiva,
Conveyance allowance is totally different from LTA. 9600 will be totally excluded from your taxable income. You need to produce only rent receipts for HRA and for claiming tax exemption. Don't exclude HRA.
Food coupons upto 2750/- p.m. is fully tax exempted. Go for it. All dept stores are accepting the food coupons for exchange of groceries and eatables in addition to select restaurents.
Pon
From India, Lucknow
Conveyance allowance is totally different from LTA. 9600 will be totally excluded from your taxable income. You need to produce only rent receipts for HRA and for claiming tax exemption. Don't exclude HRA.
Food coupons upto 2750/- p.m. is fully tax exempted. Go for it. All dept stores are accepting the food coupons for exchange of groceries and eatables in addition to select restaurents.
Pon
From India, Lucknow
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