Hr Professional With 8 Years Of Exp.
Amruta Rajput
Hr Executive

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Dear All,
I need your help regarding LTD rule. We want to add LTA as salary element for giving Tax benefit to our employees. what will be the replication as a part of employer. Is their required compliance's of any Law? Is this attract PF contribution? What is the other thing which is to be taken care while adding LTA as salary component.

1.No, LTA do not attract PF contribution.

2. There are predetermined blocks of four calendar years; the first block began in 1986 to 1989, the next block was 1990 to 1993 and so on. You can claim exemption for up to two journeys in a block of four calendar years.

You can claim exemption for up to two journeys in a block of four calendar years. The current block is 2010 to 2013.” Simply put, if you have claimed an LTA exemption in 2010, then you can claim one more till 2013.

If you are not able to make a claim in a block, there is a carry forward facility available.You can carry forward one journey, that too only in the first calendar year in the next block of four years. So in such a case, in the next block, you can claim three LTA exemptions in total.

3. How to make a claim?

Give a written declaration to your employer with travel details and the amount spent. As per the Supreme Court, if you submit a declaration stating the amount you spent, you don’t need to give the actual bills. We recommend you do keep the tickets handy in case your employer or the tax authorities need to see it later.

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