Hi,
I have a query regarding LTA Tax Exemption. My company has two options for Payment of LTA.
1. Monthly Payment (in which case, total LTA will be divided and paid in 12 months)
2. Yearly Payment (in which case, the amount will be paid in the end of financial year)
However, the finance people in our company say that exemption is allowed only in case it is paid yearly and if it is a part of monthly payroll, LTA amount paid is mandatorily taxable.
Is this clearly stated in tax law some where? If so, can some one give me the reference clause from taxation law, that clearly states LTA tax exemption is not allowed in case of monthly pay?
Whether it is paid monthly or yearly, i am going to claim only what i am entitled to claim. In that case, why exemptions are accepted only for yearly payments.
If someone can provide clarification with reference to tax laws, rather than simply providing understanding of an individual or an organization, it would be of great help to me.
Thanks in advance.
From India, New Delhi
I have a query regarding LTA Tax Exemption. My company has two options for Payment of LTA.
1. Monthly Payment (in which case, total LTA will be divided and paid in 12 months)
2. Yearly Payment (in which case, the amount will be paid in the end of financial year)
However, the finance people in our company say that exemption is allowed only in case it is paid yearly and if it is a part of monthly payroll, LTA amount paid is mandatorily taxable.
Is this clearly stated in tax law some where? If so, can some one give me the reference clause from taxation law, that clearly states LTA tax exemption is not allowed in case of monthly pay?
Whether it is paid monthly or yearly, i am going to claim only what i am entitled to claim. In that case, why exemptions are accepted only for yearly payments.
If someone can provide clarification with reference to tax laws, rather than simply providing understanding of an individual or an organization, it would be of great help to me.
Thanks in advance.
From India, New Delhi
Hi ... Your finance people have communicated properly, the LTA amount is a reimbursement amount ie., once in two years the amount spent on LTA is exempted from tax that is also on submission of your travel bills subject to your eligibility criteria. In case you want to avail the LTA amount then in a span of 4 yrs 2 yrs amount is taxable.
In the above scenario if you want to avail the LTA amount on monthly basis then you need to pay tax.
Talk to your finance people in detail, understand and proceed.
Thanks and regards
Kameswarao
From India, Hyderabad
186In the above scenario if you want to avail the LTA amount on monthly basis then you need to pay tax.
Talk to your finance people in detail, understand and proceed.
Thanks and regards
Kameswarao
From India, Hyderabad
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Note on HRA & LTA Exemption.doc