LTA Query - Financial Lease

Dear all,
LTA is usually paid for the previous financial year service and paid during begining of the current financial year. ie., if an employee worked from 01-04-2011 to 31st March 2012 he is eligible for LTA in the year 2012-13, but it depends on the purely each company policy, and as per my knowledge about rule followed by most of the companies, and even if u had paid for ADVANCE LTA and the employee is availed and submitted relevant documents u cannot recover back the same, and if it is done it may harm the reputation of the company and interest part is strict no no.

Dear Jyothi,
We pay LTA as per our HR Policy streamlined with Management's approval. LTA is one of the benefits to the employees for the services rendered/rendering to the company, once paid will not be recovered
Few Companies will pay LTA for the completed financial year as a Benefit to the employee. If you have paid for the current financial year, then as per your policy you can deduct LTA for the remaining months (Prorata basis). Charting interest on LTA is not in practice.

Unless it is specifically mentioned in the service condition, the benefit will be in favour of the employee. Here we should remember that the person became ex-employee and he can drag the case to a court of law, and the firm will loss lot of money in contesting the case. Secondly, unless there is a specific condition for recovery, even a court of law also will not be able to give a favorable judgement.

Thanx somani & Sawant,
Agreed with u,it should depend upon the companies policy.
Regards,
Mansingh
Mgr-HR

LTA is a part of salary package paid to an employee. In order to reduce the income tax burdeen a certain portion of salary is paid in the name of LTA . LTA if paid in advance can be recovered from the concerned employee. There is no rule for recovering interest on that payment,
Imposing of interest is depend upon the discreation of the management.
From HR point of view interest should not be imposed because it will send a wrong message to other employees whcih leads to dissatisfaction among the other empoyee.

As per I.T. rules, LTA tax exemption is on calender year, not on FY.
Pro-rata LTA is the industry practice.
Pon