Leave Travel Allowance Dilemma: Should LTA Be Paid to Resigning Employees Mid-Year?

Hi, in my company, we have fixed slabs for Leave Travel Allowance. Though there is no fixed rule, as a policy matter, we are paying the LTA grade-wise during any time of the calendar year. But now, if an employee is resigning during April, they are paid LTA for that year, which I think we should not. Will it be correct to pay the LTA after completion of the financial year? Please suggest.

KRISHNARAJ P R

LTA is generally paid as per the financial year, from April 1 of the current year to March 31 of the subsequent year. For example, from April 1, 2007, to March 31, 2008. This is for eligibility calculation. If an employee separates from the company in the middle, then the amount is pro-rated for the months he has worked. For instance, if the eligibility is Rs. 1000/- for this year and his Last Working Day (LWD) is September 30, 2007, he will be paid only 1000/12 x Number of months worked (April to September), which is 6 months. Therefore, he will receive only Rs. 500. Hope this clarifies! Regards