Industrial Relations And Labour Laws
Hr ( Generalist)
From India, Kannur
Plz go through the LTA claim process
1) LTA Claim shall be admissible as a reimbursement within the choice pay option exercised by the employee.
2) Availment of 5 days PL / EL is mandatory in case rebate is being claimed. Rebate will be provided only in respect of traveling expense incurred during the leave period; Submission of tickets/bills/receipts in original are mandatory for claiming rebate; Rebate shall be permissible as per IT provisions;
3) Only one claim is admissible during a Financial Year subject to an Income Tax provision. The rebate can be claimed twice in a block of 4 calendar years. The current block of 4 years is applicable w.e.f 2006.
However Tax exemption will differ -
1) Two Exemption are allowed in the block of 4 years- 2006-2009.
2) One Journey in a year is allowed for claiming LTA reimbursement.
3) First class A/C fare for train / Economy class Air fare / state transport tickets etc to be attached with claim form.
However recently there was a verdict from Supreme court where it stated that to claim LTA, employee is not bound to submit the proof related to same to the employer.
Even employees have the options to withdraw LTA as a taxable components. They just have to intimate their employer about their desire in claiming the LTA (taxabale) in their current salary.
From India, Thana
As you mentioned, in this case, the LTA is included in the CTC, as employer's contribution -annual. My wife is new to this company and everyone in that company is giving bills and taking leaves for claiming the LTA. And when confirmed with HR he said it's the company's policy. So to get that amount, employees are forcefully taking leaves.
Even there is a medical allowance (which is in CTC) getting cut from monthly salary. For that also they are insisting bills to get that amount reimbursed (even if you are not availing tax benefits). This can be done on a 3 months basis, but no bills, no reimbursement.
Is this can be a company policy? Is there way to challenge this?
Thanks in advance.
In our organisation LTA is a part of CTC and is paid on monthly basis and shown in salary slip as earning component.
Now some employees want to have tax exemption for the same. Since its already paid, considered part as income and tax is calculated and deducted too, our C.A. has advised at least for this F.Y. we should not consider LTA for Tax Exemption. Is it OK legally or is there any other solution this being last month of F.Y. 2008-09.
Secondly i have proposed a scheme to be implemented from next F.Y. 2009-10 that at the begining of F.Y. blocks to be declared 1st will be only 2009 next will be 1.1.2010-31.12.2011 and choice to be given to employee as to whether they want it as income in monthly salary OR as reimbursement on declaration as per Supreme Court Judgement. Records to be maintained by HR. I m attaching the formats please advise me as early as possible. You can even mail me on /
From India, Mumbai
I have seen a lot of similar cases wherein employees join companies finding that the salary offered is very high but later on they understand that the amount offered was the estimated cost of the company due to their employment! I am totally against this present concept, the so called CTC. In the past, all these items, viz, LTA, Medical Reimbursement etc, will be taken as 'other benefits' available to an employee whereas actual salary (certainly gross salary) will only be offered. One can easily calculate the net take home by deducting the statutory contributions towards EPF/ ESI, TDS etc. Now it is not possible. Now, even the gratuity, which becomes due only when he leaves (that also after a minimum service period of five years) is also shown as part of package and every month an amount is deducted!!! This is going to be yet another issue before such new generation HRs because, if any body claims the amount so deducted even before five years of service, the employer will be bound to pay it without any compromise. The very concept of CTC itself is cheating and I had earlier put my view in an article titled "CTC vs BTC" which is available in my blog in the following link.
http://citehr.com <link updated to site home>
If LTA is a part of salary, and every month an amount is deducted, then it is to be paid irrespective of travel and production of travel bills. Similarly, if medical reimbursement is deducted, the employee should get it back. On the otherhand, if these are not shown as part of salary and not shown in the pay slip, then the HR can demand supporting bills.
From India, Kannur
As per my knowledge most of the organizations provide IT Declaration form when any one joins the organisation and that form have an option whether you want to claim your medical and LTA monthly or actual on submission of proof to avail tax benefit.
If any employee is not in tax bracket he/she can claim all the allowances monthly without submission of any bills.
With kind regards,
From India, Pune
Can ny1 let me know wht doea tax reimbesment & tax rebate means as I am new to coprate world and unfortunately confused?
What happens in this procedure..
Also I would like to know as an employee point of view what wuld be the best from employer side
- Is it good to add LTA allowance on monthly basis or deduct it and thn pay it latron.
In the deduction part, aftr an year or so shall we get our money deduted back?What we need to do for that?Do we hav to submit our bills to HR?
Also if its added in ctc and provided on monthly basis..can v get the amount back whnevr we go fr a vacation ?
Also, How can we save tax on basis of LTA when it is added in CTC.In such situation to whom we have to submit our trip bills?
Kindly help me with my above queries.
From India, Mumbai
i thing in Mr. Bijesh case there is no clasification of employees. so while ded they ded for all employees and ded Med rem & LTA is useless bcoz the employee doesnt come under IT preview so if not clamed i thing they must return it @ the end of the financial period.
i even very well aggree with Mr. Madhu.
in CTC u can mention employer contribution ESI, EPF & bonus which has to be given, but it may varies. but other ben like Med Allow & LTA must mentioned has other Ben, bcoz if the employee whant to claim then he/she can avail the ben and if not the mangmt can ded the TDS as per source availble.
From India, Bangalore