Can LTA Be Included in Monthly Payroll or Is It Only an Annual Payment?

Hi Friends,

Hope you are all fine.

Friends, I have one query.

Can we add LTA in our monthly payroll, or is it only payable on an annual basis?

Waiting for your inputs on this.

Thanks,

Dear Friend,

In my organization, we used to pay LTA once a year, but starting from this financial year, we are paying LTA through monthly salary. The issue with LTA depends entirely on whether the LTA amount falls within the bracket of income tax. In our organization, it is considered as payment falling within the bracket, so we have begun paying it through monthly salary in order to increase the net pay.

I hope this addresses your query.

Regards,
Shailendra

Dear Soma,

LTA is to be paid as laid down in the Statutes like the Factories Act if covered. Now, if the income is taxable, the LTA can be claimed twice in a block of four years, and on submission of documents, the amount reimbursed is non-taxable up to the limit fixed. Any other payment under LTA is the same as any other allowance and is fully taxable.

So, monthly payment of LTA is not advisable for salaried persons falling within the tax bracket.

Regards,
SC