I would like to know if an employee has claimed his LTA for the financial year and then resigns in a few months, should the company recover the balance amount for those months with or without interest? Please advise ASAP.
From India, Madras
Acknowledge(0)
Amend(0)
From India, Madras
Acknowledge(0)Amend(0)
Hello Jyoti This is depends on companies policy. As per my knowledge is concern you cant not recover LTA once given and he availed benifit of it on travel.
From India, Pune
Acknowledge(0)Amend(0)
72From India, Pune
Acknowledge(0)Amend(0)
Thanks, Atul, but he has claimed LTA for the current year, April 2012 - March 2013, and is leaving in December 2012 before completing the financial year. So, should we not recover the amount paid for three months, i.e., Jan-Mar 2013?
---
I have reviewed the text you provided and made the necessary corrections for spelling, grammar, and punctuation. The paragraphs have been properly formatted with a single line break between them. Please let me know if you need any further assistance.
From India, Madras
Acknowledge(0)Amend(0)
---
I have reviewed the text you provided and made the necessary corrections for spelling, grammar, and punctuation. The paragraphs have been properly formatted with a single line break between them. Please let me know if you need any further assistance.
From India, Madras
Acknowledge(0)Amend(0)
Hello Jyoti There must be some policy of company on recoveries, and once given you can not claim back.
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
LTA is a benefit and claimed as per the IT tax for exemption. Please recover without interest on pro-rata basis., Regards, Vinod Bidwaik
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
Dear Jyoti,
Since LTA is a fixed amount that is paid once a year (financial year between April to March), if an employee has claimed their full LTA and leaves the job before the completion of the year, LTA can be recovered on a prorated basis. This is an established practice observed by all good HR-driven companies.
Regards,
Rakesh Pd Srivastav
From India, Gurgaon
Acknowledge(0)Amend(0)
Since LTA is a fixed amount that is paid once a year (financial year between April to March), if an employee has claimed their full LTA and leaves the job before the completion of the year, LTA can be recovered on a prorated basis. This is an established practice observed by all good HR-driven companies.
Regards,
Rakesh Pd Srivastav
From India, Gurgaon
Acknowledge(0)Amend(0)
Yes, Jyoti, it can be recovered from the employee in case he/she claimed LTA for the next FY. You have all the rights for that, but you should have it somewhere written in your company document where this policy is stated. There is no specific rule for LTA; it varies from org. to org. You can do things as per your company's requirements.
Keep Smiling~
From India, Mumbai
Acknowledge(0)Amend(0)
Keep Smiling~
From India, Mumbai
Acknowledge(0)Amend(0)
Normally, if an employee leaves after availing LTA for the full year, you can deduct on a pro-rata basis. It is a general practice. You may include the same in your policy and appointment order as well.
Further, this benefit is on an annual basis. No one can claim for the whole year while working only part of the year unless your policy guidelines are as such. Charging interest in such a scenario is unfair.
From India, Hyderabad
Acknowledge(0)Amend(0)
Further, this benefit is on an annual basis. No one can claim for the whole year while working only part of the year unless your policy guidelines are as such. Charging interest in such a scenario is unfair.
From India, Hyderabad
Acknowledge(0)Amend(0)
Dear Jyoti,
This may help you make better and more informed decisions.
1. Category of employee: Is he in the executive cadre? If yes, then LTA may be a part of his CTC. Committed CTC/12 is his eligibility. If altogether he has received more than the entitled amount, please recover.
Regards,
Shailesh Parikh
Vadodara (Gujarat)
99 98 97 1065
From India, Mumbai
Acknowledge(0)Amend(0)
This may help you make better and more informed decisions.
1. Category of employee: Is he in the executive cadre? If yes, then LTA may be a part of his CTC. Committed CTC/12 is his eligibility. If altogether he has received more than the entitled amount, please recover.
Regards,
Shailesh Parikh
Vadodara (Gujarat)
99 98 97 1065
From India, Mumbai
Acknowledge(0)Amend(0)
Yes, as an industrial practice, LTA is recovered once an employee separates from an organization for the remaining period of the month on a pro-rata basis, and your organization is correct on this. Normally, there used to be a written policy on it in every company. But I have not heard of recovering interest for this. You may check with your policy, and if it is written in it, you have to accept it. Wish you good luck in your future venture.
From India, Ahmadabad
Acknowledge(0)Amend(0)
From India, Ahmadabad
Acknowledge(0)Amend(0)
Dear all,
LTA is usually paid for the previous financial year's service and paid during the beginning of the current financial year. For example, if an employee worked from 01-04-2011 to 31st March 2012, he is eligible for LTA in the year 2012-13. However, it depends purely on each company's policy. As per my knowledge about the rules followed by most companies, even if you had paid for ADVANCE LTA and the employee has availed it and submitted relevant documents, you cannot recover the same. If attempted, it may harm the reputation of the company, and dealing with interest payments is a strict no-no.
From India, Bangalore
Acknowledge(0)Amend(0)
LTA is usually paid for the previous financial year's service and paid during the beginning of the current financial year. For example, if an employee worked from 01-04-2011 to 31st March 2012, he is eligible for LTA in the year 2012-13. However, it depends purely on each company's policy. As per my knowledge about the rules followed by most companies, even if you had paid for ADVANCE LTA and the employee has availed it and submitted relevant documents, you cannot recover the same. If attempted, it may harm the reputation of the company, and dealing with interest payments is a strict no-no.
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Jyothi,
We pay LTA as per our HR Policy streamlined with Management's approval. LTA is one of the benefits to the employees for the services rendered to the company; once paid, it will not be recovered.
Few companies will pay LTA for the completed financial year as a benefit to the employee. If you have paid for the current financial year, then as per your policy, you can deduct LTA for the remaining months (prorata basis). Charting interest on LTA is not in practice.
From India, Hyderabad
Acknowledge(0)Amend(0)
We pay LTA as per our HR Policy streamlined with Management's approval. LTA is one of the benefits to the employees for the services rendered to the company; once paid, it will not be recovered.
Few companies will pay LTA for the completed financial year as a benefit to the employee. If you have paid for the current financial year, then as per your policy, you can deduct LTA for the remaining months (prorata basis). Charting interest on LTA is not in practice.
From India, Hyderabad
Acknowledge(0)Amend(0)
Unless it is specifically mentioned in the service conditions, the benefit will be in favor of the employee. Here, we should remember that the person became an ex-employee, and he can take the case to court, causing the firm to lose a lot of money in contesting the case. Secondly, unless there is a specific condition for recovery, even a court of law will not be able to give a favorable judgment.
From India, Cochin
Acknowledge(0)Amend(0)
From India, Cochin
Acknowledge(0)Amend(0)
Thanx somani & Sawant, Agreed with u,it should depend upon the companies policy. Regards, Mansingh Mgr-HR
From India, Bhubaneswar
Acknowledge(0)Amend(0)
From India, Bhubaneswar
Acknowledge(0)Amend(0)
LTA is a part of the salary package paid to an employee. In order to reduce the income tax burden, a certain portion of the salary is paid in the name of LTA. LTA, if paid in advance, can be recovered from the concerned employee. There is no rule for recovering interest on that payment. Imposing interest depends upon the discretion of the management.
From an HR standpoint, interest should not be imposed because it will send a wrong message to other employees, which leads to dissatisfaction among the other employees.
From India, Mumbai
Acknowledge(0)Amend(0)
From an HR standpoint, interest should not be imposed because it will send a wrong message to other employees, which leads to dissatisfaction among the other employees.
From India, Mumbai
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Employee reference policy.doc