Understanding LTA in Private Companies: How Is It Calculated and Why Is It Paid?

Dear All Experts,

Recently, I joined a new organization where I have been provided with the LTA facility, which is credited to everybody's account during the time of Durga Puja, our main festival. However, according to the company's personnel norms, everyone receives LTA after confirmation.

Inquiry about LTA Calculation and Legal Basis

I would like to inquire about the following:

1. "What are the actual calculation norms for LTA in a private limited organization?"
2. "According to laws, why does a company pay LTA to its employees?"

I am eagerly awaiting your response.

Regards,
Pratap Kar
Kolkata

LTA and Tax Exemption

LTA is designed to encourage tourism, and the government has exempted travel expenses (tickets only) from income tax (twice in a block of 4 years). LTA travel ticket exemption can be claimed for self and dependents.

Regards,
Pon

Understanding LTA in Private Limited Organizations

1. "What are the actual calculation norms of LTA in a private limited organization?"
2. "Why does the company pay LTA to its employees as per laws?"

No specific norms for LTA; it is at the company's discretion. There is no law stipulating LTA, but there is a tax exemption available as per Income Tax rules.

Hope this clarifies.

Regards,
Pon

LTA Norms and Tax Implications

We agree with Mr. PON. Norms of LTA differ from company to company and are part of the welfare policy of the companies. As regards tax, IT rules are applicable.

Regards,
IK Arora

OK, as per both of your opinions, please clarify one thing:

LTA Calculation in Private Limited Organizations

Suppose a Private Limited Organization informs its employees at the time of joining that the company will release LTA to all employees during festivals along with a bonus. However, it is not mandatory for employees to undertake the journey or submit fare tickets. So, could you please explain how the company calculates the LTA amount for an employee?

I look forward to your reply.

Regards,
Pratap Kolkata