Hello Colleague, I have joined XXXX company where i have discovered that we have to take LTA as mandatory component and there are two methods to avail it.
-Complete 1 year calender year and travel and submit the tickets . ( Non Taxable)
-Take atleast 4 EL to get consolidated LTA in January Salary (Taxable)
My question is if i don't travel and want LTA every month in my salary for which i am ok to pay tax as well, is it wrong to ask employer to change their policy and make LTA optional.
Here it seems like they are forcing us to stay for a year since they have LTA amount accumulated every month.
Is this practice legal or right?
From India, Hyderabad
-Complete 1 year calender year and travel and submit the tickets . ( Non Taxable)
-Take atleast 4 EL to get consolidated LTA in January Salary (Taxable)
My question is if i don't travel and want LTA every month in my salary for which i am ok to pay tax as well, is it wrong to ask employer to change their policy and make LTA optional.
Here it seems like they are forcing us to stay for a year since they have LTA amount accumulated every month.
Is this practice legal or right?
From India, Hyderabad
Other than statutory salary, all other allowances are purely management prerogative and can be enforced as part of company policy. LTA is not part of your salary but it is an allowance falling outside the salary. As such it can be paid annually. It is non taxable in 2 years when you submit the bills in support of your travel. It is taxable if you claim it annually and without undertaking any travel and without submitting bills. In this case, it becomes a taxable allowance. This is the practice that is followed by all companies. I have not come across with any situation where LTA is claimed monthly.
From India, Kannur
4250From India, Kannur
Hi Madhu,
Thanks for your response. My point was can i ask the employer that i want to opt out of LTA and the amount to be credited to my kitty every month.
Lets say my gross is 15000 and 1500 per month LTA is taken out .. my net will be 13500 ( please avoid other deductions).
So even employees with very low pay have to go for LTA. My annual CTC is under tax exemption then why i need LTA in that case.
Should LTA be applicable to all ?
From India, Hyderabad
Thanks for your response. My point was can i ask the employer that i want to opt out of LTA and the amount to be credited to my kitty every month.
Lets say my gross is 15000 and 1500 per month LTA is taken out .. my net will be 13500 ( please avoid other deductions).
So even employees with very low pay have to go for LTA. My annual CTC is under tax exemption then why i need LTA in that case.
Should LTA be applicable to all ?
From India, Hyderabad
Normally, LTA will be part of salary of those whose salary comes under taxable bracket. Moreover, LTA will not be part of gross salary but being annual component, it will be outside salary break up but,obviously, under the CTC.
LTA and any other allowance, the payment of which depends upon happening of any incident/ expiry of a time (as in this case, one year of joining) should not be part of gross salary. This will not be considered as salary for deciding whether the organisation is adhering to the minimum wages policy of the Govt. Again, LTA should not be deducted from the monthly salary. If deducted, it is violation of Payment of Wages Act.
From India, Kannur
LTA and any other allowance, the payment of which depends upon happening of any incident/ expiry of a time (as in this case, one year of joining) should not be part of gross salary. This will not be considered as salary for deciding whether the organisation is adhering to the minimum wages policy of the Govt. Again, LTA should not be deducted from the monthly salary. If deducted, it is violation of Payment of Wages Act.
From India, Kannur
Hi Ajit,
From what I see you can ask your employer to pay the LTA as a salary component to you every month in your salary stack. It is up to you on whether you want to use it for a vacation.
If you do not avail the vacation option, it just remains as a taxable component and anyway as your CTC does not fall under the taxable bracket, this does not matter.
As for having to avail 4 ELs to get a consolidated LTA in the January salary, this does not seem correct.
Normally at least 1 EL should be applied to avail tax exemption on the LTA received. But this is only for tax exemption and has nothing to do with receiving the LTA itself.
From India, Bengaluru
From what I see you can ask your employer to pay the LTA as a salary component to you every month in your salary stack. It is up to you on whether you want to use it for a vacation.
If you do not avail the vacation option, it just remains as a taxable component and anyway as your CTC does not fall under the taxable bracket, this does not matter.
As for having to avail 4 ELs to get a consolidated LTA in the January salary, this does not seem correct.
Normally at least 1 EL should be applied to avail tax exemption on the LTA received. But this is only for tax exemption and has nothing to do with receiving the LTA itself.
From India, Bengaluru
sir,
main pvt. limited
company me job karta hu. mujhe mere
paiso se khareede gaye phone se kaam
karne ke liye jor dala ja raha hai.
jab maine iss baat ke liye HR walo se
baat ki to wo bolte hai ye koi policy
nahi hai, ye bas ek order hai. isske
liye wo mujhe dimagi preshani de rhe
hai. Mujhe bola ja raha hai ki agar
main apne phone se kaam nahi karunga to
wo mujhe warning latter issue karenge
aur preshaan bhi karenge. maine unse
bola aap mujhe ye order likhit me de
dijiye to wo iss baat ke liye bhi raaji
nahi ho rahe hai. iss tarah kaam karne
ke liye jab maine company join ki thi
kuch information bhi nahi di thi aur na
hi aisa kuch mere joining letter me
bola gaya tha. kya main apne employerr
ya apne seniors ke khilaaf labor court
me appeal kar sakta hu.
From India, Aligarh
main pvt. limited
company me job karta hu. mujhe mere
paiso se khareede gaye phone se kaam
karne ke liye jor dala ja raha hai.
jab maine iss baat ke liye HR walo se
baat ki to wo bolte hai ye koi policy
nahi hai, ye bas ek order hai. isske
liye wo mujhe dimagi preshani de rhe
hai. Mujhe bola ja raha hai ki agar
main apne phone se kaam nahi karunga to
wo mujhe warning latter issue karenge
aur preshaan bhi karenge. maine unse
bola aap mujhe ye order likhit me de
dijiye to wo iss baat ke liye bhi raaji
nahi ho rahe hai. iss tarah kaam karne
ke liye jab maine company join ki thi
kuch information bhi nahi di thi aur na
hi aisa kuch mere joining letter me
bola gaya tha. kya main apne employerr
ya apne seniors ke khilaaf labor court
me appeal kar sakta hu.
From India, Aligarh
Please confirm 1.whether LTA is mandatory in pvt ltd/MSME/S&E. 2.Can LTA be paid as a part of monthly salary.
From India, Lucknow
From India, Lucknow
LTA is not a mandatory component. LTA is only an additional benefit given to employees. If paid it should be as per the guidelines prescribed by the government with regard to taxability. It cannot be paid as part of monthly salary. If paid as monthly component, the very purpose of paying it will be defeated.
From India, Kannur
From India, Kannur
CTC concept was annual package to employee, and it includes all elements / perks/ bonus/ leaves (except deputation and overtime, if any)
fresh gen HR has made break up it to monthly and to some places we have seen such breakup to daily rates also. which is creating loads of confusions, as few facilities get into effect after completion of certain time frame after establishment of employer-employee relations, it can not start from day one,
viz EL subject is not part of daily wages, it is earned leave, and credited after end of calendar year, Festive Bonus is accumulation of total service in last one year but payable only at the specified date, Gratuity is payable after completion of 5 years only, within the time frame if the employer- employee relations breaks, employee does not get eligible to get these amounts, irrespective of the fact that the same is part of CTC,
if an employee claims his bonus under probation period even, then it would generation only misunderstanding, salary slips should be issued on wages part only, not on CTC basis, for safeguard of relation of employee-employer, however at the end of financial year, the HR can show the details as per CTC breakup in a separate plain sheet
if the employee want LTA then they either claim it after TWO year, or fulfil the condition to retain with establishment for at-least two years, because the LTA clause itself is explanatory , once in every two years
again, if the grauity is also shown in CTC but the employment does not continue more than 5 years, then employee would get disqualified to make claim
CTC does not determine the gross salary, net salary or components to be added or reduced, but it is just COST to COMPANY per Year on specific employee. inclusive all benefits and payouts
fresh gen HR has made break up it to monthly and to some places we have seen such breakup to daily rates also. which is creating loads of confusions, as few facilities get into effect after completion of certain time frame after establishment of employer-employee relations, it can not start from day one,
viz EL subject is not part of daily wages, it is earned leave, and credited after end of calendar year, Festive Bonus is accumulation of total service in last one year but payable only at the specified date, Gratuity is payable after completion of 5 years only, within the time frame if the employer- employee relations breaks, employee does not get eligible to get these amounts, irrespective of the fact that the same is part of CTC,
if an employee claims his bonus under probation period even, then it would generation only misunderstanding, salary slips should be issued on wages part only, not on CTC basis, for safeguard of relation of employee-employer, however at the end of financial year, the HR can show the details as per CTC breakup in a separate plain sheet
if the employee want LTA then they either claim it after TWO year, or fulfil the condition to retain with establishment for at-least two years, because the LTA clause itself is explanatory , once in every two years
again, if the grauity is also shown in CTC but the employment does not continue more than 5 years, then employee would get disqualified to make claim
CTC does not determine the gross salary, net salary or components to be added or reduced, but it is just COST to COMPANY per Year on specific employee. inclusive all benefits and payouts
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LTA (REDIFF).doc