Can I Claim LTA After 10 Months of Service if Company Policy Requires a Year?

Hi,

I was working in a company from May 2007 to March 2008 where they had mentioned that LTA is applicable to a confirmed employee only after completion of one year of service. I worked in the company for 10 months. I was confirmed after 6 months. Can the company frame such rules, or is there any Act under which I can claim LTA?

Regards,
Srinivas Mani
09833418230

Hi Shrivnivas,

First, are you still working in the same company? If the company policy mentions a clause that LTA will be paid or can be claimed after 1 year and you are still working there, you can claim only after one year. But if you have left the organization, then they should pay you the LTA amount due to you.

Regards,
Harshad

Hi Srinivas,

LTA is generally given as a part of the fixed salary component. Hence, whenever you leave, it is calculated for that period and paid in your final settlement after deducting the tax. For example, if your LTA is 24000/-, and you leave working after 4 months, then you get 8000/- of LTA in the final settlement, which is taxed.

Regards,
Kamini

Hi Harshad and Kamini,

Thanks. I left the company in March 2008. However, the company states that LTA can only be claimed after 1 year. I joined the company on May 9, 2007, and was on probation until Nov 2007, after which I was confirmed. I resigned from the job in March 2008. According to you, I can claim LTA. Is there any act based on which I can claim? The FY 2007-08 has also passed; would they provide it? They did not include it in the full and final settlement, stating that it can only be claimed if a person has worked for more than 1 year.

If you can provide the Act, I can follow up with them.

Thanks again,

Srinivas Mani
09833418230

Hi,

There is no specific act for it. But since you have resigned, they should pay you the LTA in your F & F settlement. We also have the same clause regarding LTA, but we pay if a person leaves before completion of the year in the F & F settlement. So follow up with your earlier organization; they should pay you since LTA is a part of your CTC.

Regards,
Harshad

Dear Shrinivasmani,

As mentioned earlier, your employer is supposed to pay the due amount in your Full and Final settlement from the company. To make Leave Travel Allowance (LTA) non-taxable, there are guidelines in the Income Tax Act that need to be followed.

Regards,
ACCHR

Hello Harshad, Kamini, and ACCHR,

The following was my salary structure in the previous organization where the Leave Travel Allowance (LTA) was also included in my Annual Cost to Company (CTC). I have also attached a file stating the salary. You may refer to the same.

Monthly Salary:

- Basic Salary: 14670
- Conveyance: 800
- HRA: 8500
- Medical Reimbursement: 1250
- Other Allowance: 7560
- Sodexo Meal Coupons: 910
- Provident Fund: 1760
- Leave Travel Allowance: 35450

Annual Salary:

- Basic Salary: 176040
- Conveyance: 9600
- HRA: 102000
- Medical Reimbursement: 15000
- Other Allowance: 90720
- Sodexo Meal Coupons: 10920
- Provident Fund: 21120
- Leave Travel Allowance: 14670
- Annual CTC: 440070

After submitting my resignation and before the full and final settlement, I had verbally requested payment for LTA. However, HR informed me that this benefit is applicable to employees who have completed one year of service.

My appointment/offer letter from the company stated the following regarding LTA:

"You are entitled to claim LTA only after completion of one year of service in the company."

Could you please confirm, with the provided details, whether I am eligible to claim LTA from them? If they inform me that I am not eligible, how should I proceed further to claim LTA?

Thanks & Regards,
Srinivas Mani
09833418230
Email: [srinivasmani@yahoo.com](mailto:srinivasmani@yahoo.com)

Hi,

LTA is not a statutory policy, but it is a company policy. If it was mentioned in your appointment letter that you are eligible for it only after one year of completion of service, then you cannot claim it if you leave before one year.

Regards,
Kamini

Srinivas,

LTA is normally applicable after confirmation and if the employee has a few Privilege leaves to his credit. Please note that PLs are also normally credited on completion of every year of service.

In your case, since it was specifically mentioned that LTA is applicable only after completion of 1 year and that was also signed and accepted by you, then you cannot claim for LTA before completion of a year.

Dear,

LTA is a part of your CTC which was agreed at the time of appointment. Of course, you will be entitled to LTA after one year of service because it is normally a yearly paid benefit. However, in the case of Full & Final settlement, you have the right to claim all due amounts up to the date you served with the company.

It is another matter that it will be taxable.

Thanks

Hi, I am S.M. Tripathi, HR in a brokerage house. Can anyone help me to make an appointment letter and annexure for salary when salaries are variable?

Dear Seniors,

Please guide if an employee leaves the company before confirmation, can LTA be deducted from his full and final settlement?

Thank you.