Dear Friends,
Our company wants to introduce LTA from next F.Y i.e. from 2010-11. They ask me to form a policy about LTA. Please help me to form the policy. My questions are.......
What is the limit of LTA.
How can we pay LTA to our employees monthly or yearly.
What is the tax treatment of LTA.
Any more information regarding LTA
Regards
Jugal
From India, Delhi
Our company wants to introduce LTA from next F.Y i.e. from 2010-11. They ask me to form a policy about LTA. Please help me to form the policy. My questions are.......
What is the limit of LTA.
How can we pay LTA to our employees monthly or yearly.
What is the tax treatment of LTA.
Any more information regarding LTA
Regards
Jugal
From India, Delhi
LTA is Leave Travel Allowance
This is not taxable and is a type of REIMBURSEMENT.
This should be for Managers and Above.
For LTA to claim, Employee must apply for EARNED LEAVE.
Paid Yearly.
LTA can be claimed in batch of 2/4 years.(Once in two years Or Once in Four Years.)
Regards,
For TMi System and Solution
tm(dot)isysnsol(at)gamil(dot)com
From India, New Delhi
8This is not taxable and is a type of REIMBURSEMENT.
This should be for Managers and Above.
For LTA to claim, Employee must apply for EARNED LEAVE.
Paid Yearly.
LTA can be claimed in batch of 2/4 years.(Once in two years Or Once in Four Years.)
Regards,
For TMi System and Solution
tm(dot)isysnsol(at)gamil(dot)com
From India, New Delhi
Hi
LTA can avail by any one (Including Jr. level employees)
It should be equal to one month basic
One has to avail 5 PL for the same and attach ticket for proof (or he can claim with tax deduction)
There will be no tax, if he claims LTA for two yrs together
LTA will lapse completion of two yrs
From India, Delhi
LTA can avail by any one (Including Jr. level employees)
It should be equal to one month basic
One has to avail 5 PL for the same and attach ticket for proof (or he can claim with tax deduction)
There will be no tax, if he claims LTA for two yrs together
LTA will lapse completion of two yrs
From India, Delhi
Sorry , Here is the information :
Leave Travel Allowance affects every salaried employee. Here we give you a quick low-down on what to expect.
1. You can get LTA only if you have applied for leave from your company and have actually travelled. However, international travel is not valid. You must have travelled within the country.
2. The entire cost of the holiday is not covered. 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. This means you will need to keep your air, rail or public transport ticket.
3. If you travel by car and it is owned by a central government organisation like ITDC, the state government or the local body, then LTA is permitted.
If you could not get public transport and resorted to private transport like renting a car, get a bill issued by the rental company. If the bill is not accepted by your employer, you can always file an income tax return, claim an exemption and get a refund.
4. 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.
For children born after October 1, 1998, the exemption is restricted to only two surviving children (unless, of course, one birth has resulted in multiple children like twins and triplets).
If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself or, if claiming for your family, you should travel with them.
5. LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
The current block is 2006-09 -- January 2006 to December 2009. The earlier one was from 2002-05 -- January 2002 to December 2005.
During this time period, a person is entitled to two LTA claims.
6. Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year.
So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year.
If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other.
7. You can carry forward your LTA. One LTA can be brought forward and claimed in the first year of the next block.
Let's say you do not take your LTA in 2002-05. Or that you use only one LTA. Don't worry, you will be able to take the pending LTA in 2006. This means that, in the 2006-09 block, you will be totally entitled to the three journeys.
8. 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 unutilised.
Let's say that, in the 2002-05 block, you claimed LTA in 2003. In 2004, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.
9. You must take the shortest route to your destination to be eligible for LTA.
Let's say you are going from Delhi [ Images ] to Mumbai [ Images ] on a holiday. So the cost of your travel from Delhi to Mumbai and Mumbai to Delhi will be eligible for LTA.
If you decide to go to Mumbai via Agra [ Images ], Jhansi and Itarsi, your LTA from Delhi to Agra will be covered. But Agra to Mumbai will not be covered.
Let's take another scenario. You traveled from Mumbai -- Kerala [ Images ] -- Delhi -- Mumbai.
If you take a direct connection, you will be eligible for LTA. Mumbai -- Kerala -- Delhi -- Mumbai: LTA covered
But if you throw in Hyderabad, then it goes out of gear.
Mumbai -- Thiruvananthapuram: LTA covered
Thiruvananthapuram -- Hyderabad -- Delhi: LTA not covered
Delhi -- Mumbai: LTA covered
10. If your LTA is not utilised, it gets added to your salary and you will be taxed on it.
Let's say you and your spouse are both employed and both have LTA as part of the salary package. Your LTA is Rs 20,000 and hers is Rs 20,000 too.
Both of you and your child go for a holiday. The tickets for the three of you amount to Rs 15,000. You supply the tickets to your office and this amount will be eligible for a tax deduction; the balance Rs 5,000 will be taxed. You can claim exemption only to the tune of your expenditure.
If you claim this, your spouse will not be able to claim this same holiday from her employer. His/ Her Rs 20,000 will be taxed. Unless, of course, you go for another holiday and he/ she claims it.
Or, let's say, you spend Rs 30,000 on tickets but your LTA is just Rs 20,000. You can claim up to Rs 20,000 and tell your spouse to claim his/ her ticket from his/ her employer.
Jyoti
From India, Mumbai
Leave Travel Allowance affects every salaried employee. Here we give you a quick low-down on what to expect.
1. You can get LTA only if you have applied for leave from your company and have actually travelled. However, international travel is not valid. You must have travelled within the country.
2. The entire cost of the holiday is not covered. 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. This means you will need to keep your air, rail or public transport ticket.
3. If you travel by car and it is owned by a central government organisation like ITDC, the state government or the local body, then LTA is permitted.
If you could not get public transport and resorted to private transport like renting a car, get a bill issued by the rental company. If the bill is not accepted by your employer, you can always file an income tax return, claim an exemption and get a refund.
4. 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.
For children born after October 1, 1998, the exemption is restricted to only two surviving children (unless, of course, one birth has resulted in multiple children like twins and triplets).
If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself or, if claiming for your family, you should travel with them.
5. LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
The current block is 2006-09 -- January 2006 to December 2009. The earlier one was from 2002-05 -- January 2002 to December 2005.
During this time period, a person is entitled to two LTA claims.
6. Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year.
So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year.
If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other.
7. You can carry forward your LTA. One LTA can be brought forward and claimed in the first year of the next block.
Let's say you do not take your LTA in 2002-05. Or that you use only one LTA. Don't worry, you will be able to take the pending LTA in 2006. This means that, in the 2006-09 block, you will be totally entitled to the three journeys.
8. 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 unutilised.
Let's say that, in the 2002-05 block, you claimed LTA in 2003. In 2004, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.
9. You must take the shortest route to your destination to be eligible for LTA.
Let's say you are going from Delhi [ Images ] to Mumbai [ Images ] on a holiday. So the cost of your travel from Delhi to Mumbai and Mumbai to Delhi will be eligible for LTA.
If you decide to go to Mumbai via Agra [ Images ], Jhansi and Itarsi, your LTA from Delhi to Agra will be covered. But Agra to Mumbai will not be covered.
Let's take another scenario. You traveled from Mumbai -- Kerala [ Images ] -- Delhi -- Mumbai.
If you take a direct connection, you will be eligible for LTA. Mumbai -- Kerala -- Delhi -- Mumbai: LTA covered
But if you throw in Hyderabad, then it goes out of gear.
Mumbai -- Thiruvananthapuram: LTA covered
Thiruvananthapuram -- Hyderabad -- Delhi: LTA not covered
Delhi -- Mumbai: LTA covered
10. If your LTA is not utilised, it gets added to your salary and you will be taxed on it.
Let's say you and your spouse are both employed and both have LTA as part of the salary package. Your LTA is Rs 20,000 and hers is Rs 20,000 too.
Both of you and your child go for a holiday. The tickets for the three of you amount to Rs 15,000. You supply the tickets to your office and this amount will be eligible for a tax deduction; the balance Rs 5,000 will be taxed. You can claim exemption only to the tune of your expenditure.
If you claim this, your spouse will not be able to claim this same holiday from her employer. His/ Her Rs 20,000 will be taxed. Unless, of course, you go for another holiday and he/ she claims it.
Or, let's say, you spend Rs 30,000 on tickets but your LTA is just Rs 20,000. You can claim up to Rs 20,000 and tell your spouse to claim his/ her ticket from his/ her employer.
Jyoti
From India, Mumbai
Answer to your question is :
Basically, it is a monetary benefit that you get on the expenses you incur when you travel.
Here's to clearing your doubts. This article was first published on June 6, 2005. We republish the same here with relevant changes to make it meaningful for the current calendar year.
1. On what basis can I claim LTA?
• If you fulfill two criteria, you can do so:
• i. You should have taken leave from your company
• ii. You should actually travel
• You can either travel alone or with your family. However, if your family travels without you, no LTA can be claimed.
2. How often can I claim LTA?
• i. Twice in a block of four calendar years.
• ii. LTA is not related to when you started your employment as the government has fixed blocks of years for the purpose of claim.
• iii. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
• iv. The current block is 2010-13, that is, between January 2010 and December 2013.
• v. During this time period, a person is entitled to two LTA claims.
• vi. A person can get an income tax exemption for two journeys in a block of four calendar years. But he can make a trip only once in year.
3. What if I fail to avail of it?
• In case you fail to do so, there is a carry over option.
• Let's say that in the block of four years, you never did claim any LTA.
• You can do so in the first year of the next block of four years.
4. What is the proof of travel to avail of LTA?
• According to rule 2B, you can produce an air, rail or any public transport ticket.
• You can even submit the bills issued by the car rental company if you rent a vehicle.
• However, the travel is applicable anywhere in India [ Images ] [ Images ] and not abroad. So an international air ticket will not hold.
5. Is LTA taxed?
• You can receive LTA as either reimbursement or allowance.
• Reimbursement
• In case of LTA as reimbursement, it is not taxable.
• Let's say your company offers an LTA of Rs 50,000. For proof of travel, you produce an air ticket of Rs 10,000.
• In such a case, you can claim only Rs 10,000 as LTA and it will be exempt from tax.
Allowance
• If you do not submit any proof of travel, you will get your LTA but will have to pay tax on it.
• If you produce proof of travel, it will not be taxable to the extent your proof of travel is covered.
• Let's say you are entitled to Rs 50,000 as LTA as part of your salary. Since you produced proof of travel as Rs 10,000, you will not be taxed on this amount. However you will be taxed on the net Rs 40,000 as per your income tax slab rate.
• LTA is not a fringe benefit as the latter are benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.
6. Can both spouses claim LTA?
• If both spouses are getting the LTA benefit in their places of work, they can both claim exemption on LTA from their employers and the benefit for four journeys in one block.
• They do not have to take the precaution of not travelling twice during the same year.
• Moreover, they can take the same family members or different ones as long as they stick to the definition of the members for this purpose.
• Family includes spouse, children as well as dependent parents, brothers and sisters. In respect of children born on or after October 1, 1998, the exemption will be restricted only to two surviving children unless the birth after one child has resulted in multiple births (twins or triplets).
7. If I and my wife travel this year, can we both claim LTA simultaneously?
• No. You cannot claim LTA twice for the same journey. If both of you take a holiday together and you claim LTA, she cannot.
8. If I am entitled to a particular amount as LTA, but my expenses are higher, can I claim more?
• Say in the year 2005-06, you receive on Rs 8,000 as LTA, but spend Rs 50,000 on travel. You can claim exemption only to the tune of Rs 8,000.
From India, Mumbai
Basically, it is a monetary benefit that you get on the expenses you incur when you travel.
Here's to clearing your doubts. This article was first published on June 6, 2005. We republish the same here with relevant changes to make it meaningful for the current calendar year.
1. On what basis can I claim LTA?
• If you fulfill two criteria, you can do so:
• i. You should have taken leave from your company
• ii. You should actually travel
• You can either travel alone or with your family. However, if your family travels without you, no LTA can be claimed.
2. How often can I claim LTA?
• i. Twice in a block of four calendar years.
• ii. LTA is not related to when you started your employment as the government has fixed blocks of years for the purpose of claim.
• iii. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
• iv. The current block is 2010-13, that is, between January 2010 and December 2013.
• v. During this time period, a person is entitled to two LTA claims.
• vi. A person can get an income tax exemption for two journeys in a block of four calendar years. But he can make a trip only once in year.
3. What if I fail to avail of it?
• In case you fail to do so, there is a carry over option.
• Let's say that in the block of four years, you never did claim any LTA.
• You can do so in the first year of the next block of four years.
4. What is the proof of travel to avail of LTA?
• According to rule 2B, you can produce an air, rail or any public transport ticket.
• You can even submit the bills issued by the car rental company if you rent a vehicle.
• However, the travel is applicable anywhere in India [ Images ] [ Images ] and not abroad. So an international air ticket will not hold.
5. Is LTA taxed?
• You can receive LTA as either reimbursement or allowance.
• Reimbursement
• In case of LTA as reimbursement, it is not taxable.
• Let's say your company offers an LTA of Rs 50,000. For proof of travel, you produce an air ticket of Rs 10,000.
• In such a case, you can claim only Rs 10,000 as LTA and it will be exempt from tax.
Allowance
• If you do not submit any proof of travel, you will get your LTA but will have to pay tax on it.
• If you produce proof of travel, it will not be taxable to the extent your proof of travel is covered.
• Let's say you are entitled to Rs 50,000 as LTA as part of your salary. Since you produced proof of travel as Rs 10,000, you will not be taxed on this amount. However you will be taxed on the net Rs 40,000 as per your income tax slab rate.
• LTA is not a fringe benefit as the latter are benefits that are usually enjoyed collectively by the employees and cannot be attributed to individual employees.
6. Can both spouses claim LTA?
• If both spouses are getting the LTA benefit in their places of work, they can both claim exemption on LTA from their employers and the benefit for four journeys in one block.
• They do not have to take the precaution of not travelling twice during the same year.
• Moreover, they can take the same family members or different ones as long as they stick to the definition of the members for this purpose.
• Family includes spouse, children as well as dependent parents, brothers and sisters. In respect of children born on or after October 1, 1998, the exemption will be restricted only to two surviving children unless the birth after one child has resulted in multiple births (twins or triplets).
7. If I and my wife travel this year, can we both claim LTA simultaneously?
• No. You cannot claim LTA twice for the same journey. If both of you take a holiday together and you claim LTA, she cannot.
8. If I am entitled to a particular amount as LTA, but my expenses are higher, can I claim more?
• Say in the year 2005-06, you receive on Rs 8,000 as LTA, but spend Rs 50,000 on travel. You can claim exemption only to the tune of Rs 8,000.
From India, Mumbai
Dear Jugal,
You have been asking for help to frame a policy matter, which is not so simple to be framed with the help of conflicting and misleading views that you are receiving. LTA has to incorporate several policy related issues, which you can't get at one point through very distracting and conflicting views. I know fully the nitty gritty and complexity of the Rules and procedures, as I have authored 26 reference Manuals and Guides with various editions for various organizations and employees since the year 1972.
Better, to draft LTA Rules for your company, you engage some local HR professional consultant, or if liked, your organization can also contact "Dhingra Group of Management Consultants, I-4/30-31, Sec. 16, Rohini, Delhi-110085 (Mob: 09871566822)"
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of management & Educational Consultants
New Delhi
From India, Delhi
You have been asking for help to frame a policy matter, which is not so simple to be framed with the help of conflicting and misleading views that you are receiving. LTA has to incorporate several policy related issues, which you can't get at one point through very distracting and conflicting views. I know fully the nitty gritty and complexity of the Rules and procedures, as I have authored 26 reference Manuals and Guides with various editions for various organizations and employees since the year 1972.
Better, to draft LTA Rules for your company, you engage some local HR professional consultant, or if liked, your organization can also contact "Dhingra Group of Management Consultants, I-4/30-31, Sec. 16, Rohini, Delhi-110085 (Mob: 09871566822)"
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of management & Educational Consultants
New Delhi
From India, Delhi
Dear Sanjay,
Nature and duration of leave depends from organization to organization where the employee works. Some companies allow LTA even in casual leave also. In Government Departments, an employee can avail LTA (LTC) during casual leave and special casual leave also, if he/she does not want to consume his/her earned leave (E.L.).
If the employee is not accompanying his family, he is not bound to take any leave and can claim LTA for his/her family without going on leave. Leave (Casual or Earned) is necessary only when employee avails LTA for himself/herself.
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of management & Educational Consultants
New Delhi
From India, Delhi
Nature and duration of leave depends from organization to organization where the employee works. Some companies allow LTA even in casual leave also. In Government Departments, an employee can avail LTA (LTC) during casual leave and special casual leave also, if he/she does not want to consume his/her earned leave (E.L.).
If the employee is not accompanying his family, he is not bound to take any leave and can claim LTA for his/her family without going on leave. Leave (Casual or Earned) is necessary only when employee avails LTA for himself/herself.
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of management & Educational Consultants
New Delhi
From India, Delhi
Dear TMI,
Would you please like to quote which set of LTA Rules you are referring, which allows only the senior managers to avail LTA and deprives all other staff from the facility of LTA?
Also, your reply is misleading about duration, whether once in 2 years or once in 4 years, as you have stated "in batch of 2/4 years.(Once in two years Or Once in Four Years.)" Can you please clarify which is correct "once in 2 years" or "once in 4 years" and under the provisions of which rules of Government or of any specific company?
Another clarification is needed, when only the family of the employee goes travels for LTA, why the employee MUST apply for earned leave and which specific rules provide for that?
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of management & Educational Consultants
New Delhi
From India, Delhi
Would you please like to quote which set of LTA Rules you are referring, which allows only the senior managers to avail LTA and deprives all other staff from the facility of LTA?
Also, your reply is misleading about duration, whether once in 2 years or once in 4 years, as you have stated "in batch of 2/4 years.(Once in two years Or Once in Four Years.)" Can you please clarify which is correct "once in 2 years" or "once in 4 years" and under the provisions of which rules of Government or of any specific company?
Another clarification is needed, when only the family of the employee goes travels for LTA, why the employee MUST apply for earned leave and which specific rules provide for that?
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of management & Educational Consultants
New Delhi
From India, Delhi
Dear Pramod,
On leaving service, E.L. will be calculated on pro-rata basis for the portion of the year you served, while you won't have any claim for the remaining unspent No. of casual leave. However, had you availed all the casual leave by the time you have left service, no deduction is permissible from your salary entitlements provided there is no such specifically prescribed condition of the organization you served.
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of management & Educational Consultants
New Delhi
From India, Delhi
On leaving service, E.L. will be calculated on pro-rata basis for the portion of the year you served, while you won't have any claim for the remaining unspent No. of casual leave. However, had you availed all the casual leave by the time you have left service, no deduction is permissible from your salary entitlements provided there is no such specifically prescribed condition of the organization you served.
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of management & Educational Consultants
New Delhi
From India, Delhi
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