Can I Claim My Accumulated LTA Before October for Urgent Funds?

I have been working with my current employer since October 2011. I have been receiving LTA as a part of my CTC since joining this organization; however, I have not claimed it to date, and I do not have any plans of going on vacation until March '16. The LTA has been accumulating all this time. I may need some funds soon (around August - September '15). Can you please clarify whether I can claim the accumulated LTA (after deducting applicable taxes) in the middle of the year? Also, should I wait until October to claim the same since my Date of Joining this organization is in October? In that case, I would be able to claim the LTA for one additional year completed.

Please clarify.

Regards,
Suman

Please refer to your company's policy for this. Some organizations do not allow accumulations. If you do not claim in a year, it lapses. In general, you can claim even if you do not travel, but you need to pay tax. However, check your company rules as such allowances are not covered by any law except for IT.

LTA can be claimed twice in a block of four years (2010-13, 2014-17 calendar year).

LTA blocks are calendar year-wise and not financial year-wise or as per the month of joining.

LTA Entitlement and Tax Savings

LTA is an annual entitlement. There should not be an extra amount if you claim after October (please refer to your company policy). However, you can save tax if you claim LTA in two phases (between June-September). The first time for the period 2011-2013, and the second time for the period 2014-2015. As stated above, the current block period for tax exemption is 2014-2017. In this period, if you claim LTA two times and submit relevant proof along with the LTA declaration form, you can save tax up to the limit of proof submitted by you. However, the LTA amount beyond the proof will be taxable. Since you need funds, why pay tax if the same can be saved?

You can consult your HR department for the same.

Although many members may have objections to this, as arranging relevant documents can lead to manipulation in some way, this is the practical approach generally followed by many of us.

Regards