LTA Claims

Question

Dear sir ,

My LTA is a part of CTC which we could earlier claim as a lump sum any time subject to tax rules .My entitlement is Rs 25000 pa .

Earler situation

earlier if we travelled in say june of any calendar year we could still claim the entire amount of Rs 25000/- i.e Amount accrued from jan to june + amount to be accrued from July to dec of that calendar year .

Current situation

This year i took a leave of 5 days as per company policy in may 2012 to avail the entire LTA amount of Rs25000/- as earlier. Now the company has come up with a new rule that LTA cannot be claimed on advanced basis, saying that you have to earn it first which means that i can only claim the LTA till may 2012 for present calendar year and not the balance from june2012 to dec2012.So they are dividing the Rs 25000 by 12 to arrive at the amount for one month ( prorata )and are paying the benefit only till may 2012 .

In other words my monthly LTA entitlement is Rs 25000/12 = Rs 2083/- approx . and so Rs 2083 x 5 = Rs10415 /- .

Pls advise if the company can do this .

Rajeev saini

Pankaj Batra · Answer

Most of the companies don't pay full LTA amount in advance, however the eligible full amount becomes non-taxable and company keep paying the remaining amount per month.

Say, you claimed for LTA in Aug 2012 for Rs 25000. Now till Aug end, you are entitled to get LTA for 5 months as per CTC. So company pays Rs 10415 in Aug salary. And remaining claim amount should be paid every month Rs 2083 as non-taxable.

Above process is correct as some employees may leave in middle of year and company don't want to pay amount upfront in advance.

Please ask your employer to clarify if they also are following above process.

LTA Claims

1 Answers