If an employee does not claim LTA, the amount due to an employee should be paid to him/her as taxable income.
Being part of the CTC, denying payment of LTA reflects poor HR practice.
7th November 2010 From India, Mumbai
Leave Traval Allowance (LTA) rules and policies are framed by companies and paid to employees and generally forms part of annual CTC.
Generally LTA for a year is payable in the succeeding year. For claiming LTA the employee has to undertake travel with his family members (No specific guideline is available in my opinion) and should provide proof for having spent the eligible amount for the purpose of travel (boarding and lodging not applicable). Normally companies pay the LTA amount eligible and upon the employees return from LTA leave the supporting documents must be submitted. If the employee does not undertake any travel then the LTA amount is paid and is taxed at the hands of the employee.
In the event of cessation from employment then the company usually pays the LTA amount eligible till the date of his leaving and the amount is taxed as per IT rules.
However, if the employee fails to give the notice period and quits employment without serving the notice period or without paying the notice pay, companies adjust this amount towards the dues from the employee. You have not made any mention about the notice period or notice pay, so I an unable to comment on this point.
If you have served the notice period and still the company is refusing to pay the LTA amount, then obviously it is very poor HR practice. In my opinion you can write to them pointing out to the amount if it was indicated in your offer of appointment, but as said by a member there are no specific rules relating to LTA.
8th November 2010 From India, Madras
Whatever Mr.Vasant Nair & Mr.M.V.Kannan given above is absolutely correct.
You may write to the HR Head of your previous company (marking cc to the CEO of that company) asking him to pay the LTA immediately. Wait for 15 days time. If you dont get the amount, then write to CEO direct and wait for 15 days time. And still you dont receive the amount, you seek the help of a Labour Lawyer. Through the Labour Lawyer you write to that CEO direct. Finally you definately get the amount.
9th November 2010 From India, Bangalore