Hi All,
I need your help. I'm in an HR Outsourcing BPO. I want to know something related to Salary Components. In Salary, there are many components like Basic salary, LTA, HRA, MEDICAL, etc.
So, the question my subordinate asked me is why components like LTA and Conveyance Allowances are added in Salary. LTA is a component paid to provide for any expenditure by associates towards any travel for themselves and their dependents. We also have a pick-up and drop facility. So, why is this component added to Salary?
Please help and reply as soon as possible.
From United States, Lincolnshire
Acknowledge(0)
Amend(0)
I need your help. I'm in an HR Outsourcing BPO. I want to know something related to Salary Components. In Salary, there are many components like Basic salary, LTA, HRA, MEDICAL, etc.
So, the question my subordinate asked me is why components like LTA and Conveyance Allowances are added in Salary. LTA is a component paid to provide for any expenditure by associates towards any travel for themselves and their dependents. We also have a pick-up and drop facility. So, why is this component added to Salary?
Please help and reply as soon as possible.
From United States, Lincolnshire
Acknowledge(0)Amend(0)
Hi Alka,
These components are added to the salary for their tax breaks. LTA is tax-exempt for 2 years in every block of 4 years beginning from 1986-89, provided you follow the tax-exemption rules. So it is a good tax-saving component.
Conveyance Allowance is exempt up to Rs. 800 per month. However, I am not sure whether you could avail of this exemption in a BPO company because your company provides pick-n-drop facility.
Warm regards,
Vikram
From United States, Auburn
Acknowledge(0)Amend(0)
These components are added to the salary for their tax breaks. LTA is tax-exempt for 2 years in every block of 4 years beginning from 1986-89, provided you follow the tax-exemption rules. So it is a good tax-saving component.
Conveyance Allowance is exempt up to Rs. 800 per month. However, I am not sure whether you could avail of this exemption in a BPO company because your company provides pick-n-drop facility.
Warm regards,
Vikram
From United States, Auburn
Acknowledge(0)Amend(0)
Hi,
The LTA component, as rightly mentioned, is added to get tax benefit. LTA up to Rs. 25,000 is exempt from tax, and Rs. 800 as conveyance is also exempt. However, it cannot be considered a part of the monthly salary. Generally, companies provide LTA as a benefit to employees who have successfully completed 12 months of service with the company.
If you have any other queries, please let us know.
Cheers,
Archna
From India, Delhi
Acknowledge(0)Amend(0)
115The LTA component, as rightly mentioned, is added to get tax benefit. LTA up to Rs. 25,000 is exempt from tax, and Rs. 800 as conveyance is also exempt. However, it cannot be considered a part of the monthly salary. Generally, companies provide LTA as a benefit to employees who have successfully completed 12 months of service with the company.
If you have any other queries, please let us know.
Cheers,
Archna
From India, Delhi
Acknowledge(0)Amend(0)
I am still not clear -can employees of companies with pick-n-drop facility avail the exemption in conveyance allowance?
From United States, Auburn
Acknowledge(0)Amend(0)
From United States, Auburn
Acknowledge(0)Amend(0)
Hi Alka,
I need your help. I'm in an HR Outsourcing BPO. I want to know something related to Salary Components. In Salary, there are many components, like Basic salary, LTA, HRA, MEDICAL, etc. So the question my subordinate asked me is why these components like LTA, Conveyance Allowances are added in Salary. Because LTA is a component paid to provide for any expenditure by an associate towards any travel in respect to himself/herself and dependents thereof, and we are getting pick and drop facility also. So why is this component added in Salary?
A very good question posed by your subordinates and is understandable.
As my colleagues mentioned, LTA is provided and is given exemption as per the tax laws, which is valid for high-income professionals who are looking for tools/ways to save tax.
Perhaps this facility could be dropped as they want more take-home salary than waiting for a year to claim the two years' entitlement and then provide the genuine travel & supporting bills. Instead of this, you could give them meal coupons like Sodexo meal vouchers on a monthly basis. Or have a slab that up to this salary, no LTA... or add this to their taxable income, and they would get the exemption if they provide the bills.
Since you are providing the pick & drop facility, then this conveyance of Rs 800 may not be correct, as this is valid if there is no company-provided facility or car and the employees have to make their arrangements to come to the office. I would suggest having a re-look at this issue.
Regarding the salary structure, please use the facility of search on the top left to find the recommended structure for payroll.
Regards,
Rajat
From India, Pune
Acknowledge(0)Amend(0)
I need your help. I'm in an HR Outsourcing BPO. I want to know something related to Salary Components. In Salary, there are many components, like Basic salary, LTA, HRA, MEDICAL, etc. So the question my subordinate asked me is why these components like LTA, Conveyance Allowances are added in Salary. Because LTA is a component paid to provide for any expenditure by an associate towards any travel in respect to himself/herself and dependents thereof, and we are getting pick and drop facility also. So why is this component added in Salary?
A very good question posed by your subordinates and is understandable.
As my colleagues mentioned, LTA is provided and is given exemption as per the tax laws, which is valid for high-income professionals who are looking for tools/ways to save tax.
Perhaps this facility could be dropped as they want more take-home salary than waiting for a year to claim the two years' entitlement and then provide the genuine travel & supporting bills. Instead of this, you could give them meal coupons like Sodexo meal vouchers on a monthly basis. Or have a slab that up to this salary, no LTA... or add this to their taxable income, and they would get the exemption if they provide the bills.
Since you are providing the pick & drop facility, then this conveyance of Rs 800 may not be correct, as this is valid if there is no company-provided facility or car and the employees have to make their arrangements to come to the office. I would suggest having a re-look at this issue.
Regarding the salary structure, please use the facility of search on the top left to find the recommended structure for payroll.
Regards,
Rajat
From India, Pune
Acknowledge(0)Amend(0)
That was a really good input. Can anyone let me know why nowadays few companies can be exempted from PF deductions and ESI deductions? What are the terms and conditions involved? Though I am aware of the conditions involving ₹6500 and ₹7500. Also, the other components of the salary structure that are tax-exempted, for example, medical claims.
From United States, Irvine
Acknowledge(0)Amend(0)
From United States, Irvine
Acknowledge(0)Amend(0)
Hi Everybody!
Basically, LTA is a monetary benefit that you get on the expenses you incur when you travel to any place once in a block of two years, which one can avail if he or she fulfills the following criteria:
1. One should have taken leave from your company.
2. One should actually travel.
It cannot be granted for pick & drop facility (as some of you people have confusion).
Some notes on LTA which may help:
Proof for Claiming LTA: According to rule 2B, you can produce an air, rail, or any public transport ticket. You can even submit the bills issued by the car rental company if you rent a vehicle. However, the travel is applicable anywhere in India and not abroad, so an international air ticket will not hold. As it is all about travel to any place in India, pick & drop never comes into the scenario.
Available for Spouse & Dependent children of the employee.
Hope it may help you all!!!
Cheers! :)
Ashish Jain
From Australia, Sydney
Acknowledge(0)Amend(0)
Basically, LTA is a monetary benefit that you get on the expenses you incur when you travel to any place once in a block of two years, which one can avail if he or she fulfills the following criteria:
1. One should have taken leave from your company.
2. One should actually travel.
It cannot be granted for pick & drop facility (as some of you people have confusion).
Some notes on LTA which may help:
Proof for Claiming LTA: According to rule 2B, you can produce an air, rail, or any public transport ticket. You can even submit the bills issued by the car rental company if you rent a vehicle. However, the travel is applicable anywhere in India and not abroad, so an international air ticket will not hold. As it is all about travel to any place in India, pick & drop never comes into the scenario.
Available for Spouse & Dependent children of the employee.
Hope it may help you all!!!
Cheers! :)
Ashish Jain
From Australia, Sydney
Acknowledge(0)Amend(0)
Hi, Could you please send me a format of consolidated salary slip. i need it please. and also tell me the calculation for professional tax.
From India, Bharat
Acknowledge(0)Amend(0)
From India, Bharat
Acknowledge(0)Amend(0)
Hi Radhikam,
Calculation for Professional Tax:
Gross Salary ranging from up to 2999: Nil
3000 - 4999: 30 Rs.p.m
5000 - 7999: 60 Rs.p.m
8000 - 9999: 100 Rs.p.m
10000 - 14999: 150 Rs.p.m
15000 and above: 200 Rs.p.m
Hope this will help you.
Warm Regards,
Suresh
Acknowledge(0)Amend(0)
Calculation for Professional Tax:
Gross Salary ranging from up to 2999: Nil
3000 - 4999: 30 Rs.p.m
5000 - 7999: 60 Rs.p.m
8000 - 9999: 100 Rs.p.m
10000 - 14999: 150 Rs.p.m
15000 and above: 200 Rs.p.m
Hope this will help you.
Warm Regards,
Suresh
Acknowledge(0)Amend(0)
Hi Archana,
The salary structure at our organization is as follows:
- Basic
- HRA
- DA
- Conveyance
- Medical Reimbursement
- LTA
Should LTA not be a part of the salary? Also, how should we design the tax-saving structure for medical reimbursement?
Neel
From India, Pune
Acknowledge(0)Amend(0)
The salary structure at our organization is as follows:
- Basic
- HRA
- DA
- Conveyance
- Medical Reimbursement
- LTA
Should LTA not be a part of the salary? Also, how should we design the tax-saving structure for medical reimbursement?
Neel
From India, Pune
Acknowledge(0)Amend(0)
Hello friend,
Salaries are the monetary consideration for the service you provide to the company. The monthly remuneration is designed in such a way that the employee does not lose a substantial part of their salary in the form of taxes. In order to achieve this, the salary is divided into a number of elements like basic, HRA, conveyance, transport, medical, children's education, education allowance, uniform allowance, and so forth. There are a few elements that are totally tax-exempt, like children's education up to a maximum of two hundred and conveyance of 800. Other elements like medical, transport, HRA, uniform, etc., are tax-exempt up to a certain amount subject to the provision of bills.
The elements in the salary are structured based on the levels and the package. These structures vary from industry to industry.
Thank you.
From India, Hyderabad
Acknowledge(0)Amend(0)
Salaries are the monetary consideration for the service you provide to the company. The monthly remuneration is designed in such a way that the employee does not lose a substantial part of their salary in the form of taxes. In order to achieve this, the salary is divided into a number of elements like basic, HRA, conveyance, transport, medical, children's education, education allowance, uniform allowance, and so forth. There are a few elements that are totally tax-exempt, like children's education up to a maximum of two hundred and conveyance of 800. Other elements like medical, transport, HRA, uniform, etc., are tax-exempt up to a certain amount subject to the provision of bills.
The elements in the salary are structured based on the levels and the package. These structures vary from industry to industry.
Thank you.
From India, Hyderabad
Acknowledge(0)Amend(0)
professional tax defers fromstate to state. befor going ahed with the slabs given try to know from which state they are sending
From India, Hyderabad
Acknowledge(0)Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)
Hello,
I hope this link helps you: https://www.citehr.com/99840-complet...pensation.html.
Thank you,
Octavious
From India, Mumbai
Acknowledge(0)Amend(0)
I hope this link helps you: https://www.citehr.com/99840-complet...pensation.html.
Thank you,
Octavious
https://www.citehr.com/99968-major-hr-links.html#post386938
From India, Mumbai
Acknowledge(0)Amend(0)
Hi Radhika,
Could you please send me a format of a consolidated salary slip? I need it, please. Also, could you explain the calculation for professional tax?
Professional Tax is calculated based on defined slabs as mentioned below:
- Gross Salary: PT Tax to be deducted in Rs.
- 0-3000: Nil
- 3000 - 6000: 20 Rs
- 6000 - 9000: 80 Rs
- 9000 - 12000: 120 Rs
- 12000 & Above: 200 Rs
This slab is applicable for Ahmedabad city, and it is similar for other cities. Please let me know which city you are in.
From India, Ahmadabad
Acknowledge(0)Amend(0)
Could you please send me a format of a consolidated salary slip? I need it, please. Also, could you explain the calculation for professional tax?
Professional Tax is calculated based on defined slabs as mentioned below:
- Gross Salary: PT Tax to be deducted in Rs.
- 0-3000: Nil
- 3000 - 6000: 20 Rs
- 6000 - 9000: 80 Rs
- 9000 - 12000: 120 Rs
- 12000 & Above: 200 Rs
This slab is applicable for Ahmedabad city, and it is similar for other cities. Please let me know which city you are in.
From India, Ahmadabad
Acknowledge(0)Amend(0)
Leave Travel Allowance affects every salaried employee. Here we give you a quick low-down on what to expect.
1. You can get LTA only if you have applied for leave from your company and have actually traveled. However, international travel is not valid. You must have traveled within the country.
2. The entire cost of the holiday is not covered. Only the travel costs are covered. So, whether you fly, hop on a train, or take public transport, you will have to show the ticket to claim your LTA. This means you will need to keep your air, rail, or public transport ticket.
3. If you travel by car and it is owned by a central government organization like ITDC, the state government, or the local body, then LTA is permitted.
If you could not get public transport and resorted to private transport like renting a car, get a bill issued by the rental company. If the bill is not accepted by your employer, you can always file an income tax return, claim an exemption, and get a refund.
4. LTA covers travel for yourself and your family. Family, in this case, includes yourself, parents, siblings dependent on you, spouse (even if your spouse is working), and children.
For children born after October 1, 1998, the exemption is restricted to only two surviving children (unless, of course, one birth has resulted in multiple children like twins and triplets).
If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself or, if claiming for your family, you should travel with them.
5. LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
The current block is 2006-09—January 2006 to December 2009. The earlier one was from 2002-05—January 2002 to December 2005.
During this time period, a person is entitled to two LTA claims.
6. Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year.
So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year.
If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other.
7. You can carry forward your LTA. One LTA can be brought forward and claimed in the first year of the next block.
Let's say you do not take your LTA in 2002-05. Or that you use only one LTA. Don't worry, you will be able to take the pending LTA in 2006. This means that, in the 2006-09 block, you will be totally entitled to the three journeys.
8. If you switch jobs, you can get the LTA not only from your present organization but also from your former employer if the concession is lying unutilized.
Let's say that, in the 2002-05 block, you claimed LTA in 2003. In 2004, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.
9. You must take the shortest route to your destination to be eligible for LTA.
Let's say you are going from Delhi to Mumbai on a holiday. So the cost of your travel from Delhi to Mumbai and Mumbai to Delhi will be eligible for LTA.
If you decide to go to Mumbai via Agra, Jhansi, and Itarsi, your LTA from Delhi to Agra will be covered. But Agra to Mumbai will not be covered.
Let's take another scenario. You traveled from Mumbai—Kerala—Delhi—Mumbai.
If you take a direct connection, you will be eligible for LTA. Mumbai—Kerala—Delhi—Mumbai: LTA covered
But if you throw in Hyderabad, then it goes out of gear.
Mumbai—Thiruvananthapuram: LTA covered
Thiruvananthapuram—Hyderabad—Delhi: LTA not covered
Delhi—Mumbai: LTA covered
10. If your LTA is not utilized, it gets added to your salary, and you will be taxed on it.
Let's say you and your spouse are both employed and both have LTA as part of the salary package. Your LTA is Rs 20,000, and hers is Rs 20,000 too.
Both of you and your child go for a holiday. The tickets for the three of you amount to Rs 15,000. You supply the tickets to your office and this amount will be eligible for a tax deduction; the balance Rs 5,000 will be taxed. You can claim exemption only to the tune of your expenditure.
If you claim this, your spouse will not be able to claim this same holiday from her employer. His/Her Rs 20,000 will be taxed. Unless, of course, you go for another holiday, and he/she claims it.
Or, let's say, you spend Rs 30,000 on tickets but your LTA is just Rs 20,000. You can claim up to Rs 20,000 and tell your spouse to claim his/her ticket from his/her employer.
From India, Mumbai
Acknowledge(0)Amend(0)
1. You can get LTA only if you have applied for leave from your company and have actually traveled. However, international travel is not valid. You must have traveled within the country.
2. The entire cost of the holiday is not covered. Only the travel costs are covered. So, whether you fly, hop on a train, or take public transport, you will have to show the ticket to claim your LTA. This means you will need to keep your air, rail, or public transport ticket.
3. If you travel by car and it is owned by a central government organization like ITDC, the state government, or the local body, then LTA is permitted.
If you could not get public transport and resorted to private transport like renting a car, get a bill issued by the rental company. If the bill is not accepted by your employer, you can always file an income tax return, claim an exemption, and get a refund.
4. LTA covers travel for yourself and your family. Family, in this case, includes yourself, parents, siblings dependent on you, spouse (even if your spouse is working), and children.
For children born after October 1, 1998, the exemption is restricted to only two surviving children (unless, of course, one birth has resulted in multiple children like twins and triplets).
If your family travels without you, no LTA can be claimed. You have to make the trip, either by yourself or, if claiming for your family, you should travel with them.
5. LTA is not related to when you started your employment. The government fixes blocks of years. These blocks are not financial years (April 1 to March 31); they are calendar years (January 1 to December 31).
The current block is 2006-09—January 2006 to December 2009. The earlier one was from 2002-05—January 2002 to December 2005.
During this time period, a person is entitled to two LTA claims.
6. Though you can claim two journeys in a block of four years, you can claim the LTA benefit just once in a year. You cannot claim both the journeys in one year.
So, while a person can get an income tax exemption for two journeys in a block of four calendar years, he can make a trip only once a year.
If you make two trips in a year, you lose one. One way out is to claim one and make your spouse claim the other.
7. You can carry forward your LTA. One LTA can be brought forward and claimed in the first year of the next block.
Let's say you do not take your LTA in 2002-05. Or that you use only one LTA. Don't worry, you will be able to take the pending LTA in 2006. This means that, in the 2006-09 block, you will be totally entitled to the three journeys.
8. If you switch jobs, you can get the LTA not only from your present organization but also from your former employer if the concession is lying unutilized.
Let's say that, in the 2002-05 block, you claimed LTA in 2003. In 2004, you switched jobs. You can still claim your second journey with your new employer. Of course, your new employer will ask to look at your earlier tax returns to see whether it has been claimed or not.
9. You must take the shortest route to your destination to be eligible for LTA.
Let's say you are going from Delhi to Mumbai on a holiday. So the cost of your travel from Delhi to Mumbai and Mumbai to Delhi will be eligible for LTA.
If you decide to go to Mumbai via Agra, Jhansi, and Itarsi, your LTA from Delhi to Agra will be covered. But Agra to Mumbai will not be covered.
Let's take another scenario. You traveled from Mumbai—Kerala—Delhi—Mumbai.
If you take a direct connection, you will be eligible for LTA. Mumbai—Kerala—Delhi—Mumbai: LTA covered
But if you throw in Hyderabad, then it goes out of gear.
Mumbai—Thiruvananthapuram: LTA covered
Thiruvananthapuram—Hyderabad—Delhi: LTA not covered
Delhi—Mumbai: LTA covered
10. If your LTA is not utilized, it gets added to your salary, and you will be taxed on it.
Let's say you and your spouse are both employed and both have LTA as part of the salary package. Your LTA is Rs 20,000, and hers is Rs 20,000 too.
Both of you and your child go for a holiday. The tickets for the three of you amount to Rs 15,000. You supply the tickets to your office and this amount will be eligible for a tax deduction; the balance Rs 5,000 will be taxed. You can claim exemption only to the tune of your expenditure.
If you claim this, your spouse will not be able to claim this same holiday from her employer. His/Her Rs 20,000 will be taxed. Unless, of course, you go for another holiday, and he/she claims it.
Or, let's say, you spend Rs 30,000 on tickets but your LTA is just Rs 20,000. You can claim up to Rs 20,000 and tell your spouse to claim his/her ticket from his/her employer.
From India, Mumbai
Acknowledge(0)Amend(0)Gathering data for an AI comment.... Sending emails to relevant members...
Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
SALARY CALCULATOR & INCOME TAX.zip
SALARY CAN BE SPLIT INTO COMPONENTS BUT NOT LESS THAN THE MINIMUM WAGES.docx
Salary less tax - CTC.xls