Yes for tax exemption purpose LTA can be claimed twice in a block of 4 years. Probably those employees whom you are referring may be
1) those who are not come under the purview of income tax based on their total earning for the years. In that case they can claim LTA as taxable and no tax implications will be there.
2) those who are willing to claim LTA on yearly basis and they will be given 2 exemptions, subject to production of travel bills and remaining 2 years they will claim as taxable. Based on the Income tax slab they fall under (10%,20% ,30%) tax will be recovered by the employer.
There is no rule that LTA cannot be claimed every year. Only to get tax exemption employer advise to submit LTA claim twice in block of 4 years.
From India, Madras
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