LTA Eligibility Confusion: Can We Claim Benefits for December 2010 or March 2011?

Hi, please advise about LTA eligibility. My friend and I joined an organization in March 2010. Can we get the LTA benefit for December 2010 or March 2011? Please guide.

Thanks and regards,
Nanabala

Dear Nanabala,

LTA is paid on a calendar year basis. The current LTA block as per the IT Act is 2010 to 2013. Generally, LTA is paid by companies upon completion of one year. If your company follows this procedure, then you will be entitled to LTA only in March 2011. LTA claimed twice in the block of the above 4 years is exempt from tax. For example, you can claim LTA for the calendar year 2010 in 2011 before December 2011. Likewise, you can claim LTA for 2011 and 2012 in the calendar year 2013.

LTA for the calendar year 2013 and 2014 can be claimed in 2015, and LTA for calendar years 2015 and 2016 can be claimed in 2017 and so on. But please note that LTA is not taxed only if you undertake the travel with your family and produce evidence to that effect. Trust the matter is clarified.

M.V. KANNAN

Hi, I wanted to confirm that LTA requires 3 consecutive P/L to be taken to claim the allowances. Please confirm back.

Regards,
Fleurette

To claim LTA, you need to be on PL. How many PLs are part of the company policy? The Income Tax Act mentions that you should be on PL.

Regards,
Mahendra

Dear Nanabala, LTA is paid on a calendar year basis. The current LTA block as per the IT Act is 2010 to 2013. Generally, LTA is paid by companies upon completion of one year. If your company follows this procedure, then you will be entitled to LTA only in March 2011. LTA claimed twice in the block of the above 4 years is exempt from tax. For example, you can claim LTA for the calendar year 2010 in 2011 before December 2011. Likewise, you can claim LTA for 2011 and 2012 in the calendar year 2013. LTA for the calendar year 2013 and 2014 can be claimed in 2015, and LTA for the calendar years 2015 and 2016 can be claimed in 2017 and so on. But please note that LTA is not taxed only if you undertake the travel with your family and produce evidence to that effect.

Trust the matter is clarified.

M.V.KANNAN

LTA Claim and Exemption

Let us be very clear about LTA claim and LTA Exemption. You can claim LTA every year also (based on your company policy), since it is part of your CTC. Exemption can be claimed only twice in the block of 4 years. This exemption can be in the years you want and not necessarily after 2 years have completed. Also, if you have not utilized LTA exemption in one block, one LTA can be carried forward to the FIRST year of the next block.

Regards,
Mahendra

Newly joined employee, when will I be eligible for LTA?