LTA With Monthly Salary? - CiteHR
Labour Law Compliances
Lakshmi Gopal
Rajeev Verma
Hr Professional
Sales & Marketing Operations ~ Distribution
Satpreet Kaur
Human Resource
Private Services
Hr Manager
+3 Others

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hi, Can LTA be added in the monthly salary and bills can be submitted once in a year? I would like to know how the other companies are handling LTA? Pl advise Thanks Lakshmi
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Yes, very much it can be given on monthly basis to the employees. This is one of the tool that many Comapny's are using to give the benefit to employee in terms of more monthly gross salary. LTA is a salary component, which is non taxable. Employee needs to show the supporting documents to get the benefit of it. If end of the year hs is not able to produce the document the LTA amount will be taxable for him and tax will be deducted for entire year. It goes with 3 year basis. Now running slab is 2006-2009.
I hope this will help.
Hi Mansavi,

Thanks for your reply. However my finance department is very particular that LTA should be paid annnual only since per Income Tax Act, LTA is paid on an annual basis. It cannot be paid monthly, since it is meant for meeting the travel expenses twice in a block of 4 years. In our opinion it cannot be paid monthly. The income tax can take the view that the same is taxable if they come to know the basis of payment.

Can you comment on this?
Hi Laxmi,
Yes LTA should be paid only once in a year, In our company we show LTA in addition as well as deduction column in the monthly payslip. So at the end of the year people can claim LTA by filling up the LTA claim form, if they submit proper documents , it will be tax free, and if they wish to claim without any supporting then it becomes taxable. Also while paying we take care the LTA block and accordingly the LTA is paid.
Hi lakshmi LTA can be claimed only once in a year. Amount for LTA cannot be shown on monthly basis. It is tax exempted for every two years. Regards kamini
Hi Laxmi,
LTA component is that part of the salary which is included in the CTC but paid on the Yearly basis. As LTA is governed by the INCOME TAX Rules. Under the INCOME TAX Rules an employee can claim the LTA twice in a block of 4 Year. In our company it is paid as per the ICOME TAX Rules means if any employee claims the LTA on yearly basis every year than his TWO LTA claims bound to be Income Taxed and he/she can get the Tax exemption in TWO.
I hope this will clear your doubts.

Dear Mansavi Greetings! We can’t include LTA as a monthly component. Its a yearly component.
Hi, Why LTA cannot be a monthly component. It is the entitlement of an employee whether it is paid annual or monthly. If it is re-imbursed then it is not taxable, if paid monthly then it is taxable. Can anyone question why it is paid monthly, it is at the discretion of employee.Regards,Elancheran
Can we claim Medical Allowances for Entire year in September by providing supporting documents.
Can I ask My HR department to re-imburse the same on monthly basis and at the end of the year I will provide necessary documents.
In our company we are paying monthly and also yearly basis to employees as per they requested. If we paid monthly basis we are deducting the tax. Can we give any tax exemption to them? or Is it coming under FBT?
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