LTA is an annual component of employee remuneration. There is no chance that it will form part of salary even if the definition of wages under the EPF & MP Act is amended and all emoluments received while on employment are brought under the definition of wages on which PF is to be contributed.
Normally LTA will be equal to one month’s basic salary and by including it in any month, naturally, the PF qualifying salary would increase and perhaps crosses Rs 15000. Since PF Organisation is under no right to demand contribution on an amount above Rs 15000, the significance of its inclusion is very limited.
Madhu.T.K