Full & Final Settlement Of LTA

Sushil_Kumar
Hi
One of the employee is leaving the organisation and he has accumulated LTA which he has not claimed yet. His LTA entitlement is Rs.20,000/- per year which is part of CTC. As per his joining & leaving date I have calculated LTA as follows.
LTA calculation
17-31st March-10 20000/12*15/31 Rs. 806
April-10 to March-11 20000 Rs. 20,000
1-12th April -11 20000/12*12/30 Rs. 667
Total Rs. 21,473
I have following questions.
1. Is above calculation correct.
2. If in any month employee had LWP then should we deduct applicable amount for these LWP days from his eligible amount of LTA.
3. Do we need to pay this as ex-gratia or as taxable LTA as employee is not going to submmit any bills.
4. How this will be presented in form 16.
5. in accounting how it will be treated.
6. Any other suggestions from members.
Thanks & regards
Sushil
pon1965
If it is part of CTC, prorata calculation of LTA considering his LWP days is to be made. It is taxable income at the hands of employee and TDS shall be made accordingly.
pon
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