LTA Policy & Allowance - Form 16
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LTA Policy & Allowance - Form 16

lina_anil Started The Discussion:

Hello everybody, I have to draft a LTA policy for my Sr management. Can anyone help me as to how do I calculate the allowance for the same or how is the allowance calculated? Pls help

Madhu.T.K - Member Since: Sep 2007
Leave Travel Allowance Policy is a welfare measure taken by the respective firm and as such there may not be uniformity in the policies even within a particular industry.

Normally, LTA shall be given to those who have completed at least one year of service. This is to ensure that the employee doesn't leave immediately after availing LTA. LTA will be in the form of journey fare reimbursement for the concerned employee as well as his family members. Some companies impose restrictions as to the number of family members like spouse, maximum two children or un married children or children of upto 21 years of age and so on and may include dependent parents also.

Normally, length of jouney to be undertaken shall also be stated in the LTA policy. It may be from place of employment to home town and back or anywhere in India or even world. The class of travel may be defined according to the category of employees and as such some will be eligible to travel by Air, some will be eligible to travel by AC class and so on.

The maximum amount which can be allowed shall be mentioned in the policy. Mostly, LTA will be paid according to the basic pay of the respective employee.

The frequency of LTA is yet another point to be considered while drafting an LTA policy. Employees may be eligible for LTA once in every year or once in two years or even three years. Normally, LTA accrues in two years.

Whether LTA lapses if unavailed should be clarified in the policy. Normally, LTA being reimbursement, it lapses if unavailed.

Generally, employees availing LTA may be eligible for advance also. The maximum percentage of advance to which employee is eligible shall be stated in the policy.

These are general guideline only. You can have your own arrangements in this regard according to the capacity of the company.

Regards,

Madhu.T.K

ayonadehr - Member Since: Nov 2007
Hello Lina, Please see the attached. You will be able to get a thorough understanding bt what LTA is all abt, and based on that, u would be able to frame the LTA policy. Thanx and Regards, Ayona


Attached FilesProvided by community member ayonadehr. Join us to learn and grow with your peers.
File Type: doc LTA.doc (29.0 KB, 1949 views)
File Type: doc LTA (REDIFF).doc (30.5 KB, 1093 views)
File Type: doc LTA FUNDAMENTALS.doc (53.5 KB, 1288 views)
shweta.rathor - Member Since: Aug 2008
Thanks, this was a useful information which helped me framing our LTA policy as well :icon1:

vkpappy - Member Since: Feb 2010
hi

I have a big query here on LTA Tax exemption... Somebody please help me...

i have applied for LTA in my present compnay and got Tax exemption by submitting my travel bill for the year 2007-2008. For this year i.e 2008-2009 again i applied for LTA and My company finance people are not accepting LTA bills. They tell like, Since i worked for two years in my present organisation i can apply for LTA only one time... But as per Rules i hope, i can be Tax Exempted for two times in the period (2005-2009)...

i agrued many times, but i did work... my finance people are asking for proof... that i havent gone for LTA tax exemption in my previous company... how can i provide such a proof... My CTC in my previous company is below Tax slab... so i have not produced LTA bill.. but i remember i claimed the money from my preivous company..

Now i need a proof which should state that i have not claimed LTA tax Exemption in my Previous company.... its difficult to contact my previous company and ask for details...

Someone tell me... how i can get ride of this.. and be LTA Tax Expemted fot the current year 2008-2009....

Sushil_Kumar - Member Since: Oct 2008
you can produce form 16 issued by previous employer or income tax retuns filed by you. and show them that there was no LTA exemption claimed.

sharpank - Member Since: Jul 2010
Hi All, No doubt the information provided by the Ayona rally useful. Plz find the policy use by our co. hope this will help you. To frame policy


Attached FilesProvided by community member sharpank. Join us to learn and grow with your peers.
File Type: doc LTA policy.doc (36.5 KB, 404 views)
Pragya Yadav - Member Since: Nov 2010
Hello Vkpappy,

Its not the rule so far what i am aware about it that u can avail the tax exemption on LTA Amount only 1 in duration of 4 yrs.
you can avail LTA claim twice in 4 yrs period but its only 1 time tax free and 1 time taxable.

Regards,
Pragya

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