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LTA Policy

The document outlines an organization's Leave Travel Assistance (LTA) policy. It states that employees can claim LTA once per year for themselves and dependents. To qualify, the trip must be a minimum of 5 days and employees must get approved leave. Claims are submitted with receipts to HR who processes payment. Any unused LTA amount is paid out after tax at year-end. The policy also describes relevant income tax provisions for LTA, including exemptions for two family trips in a four-year period, with differential amounts taxed. Employees are responsible for complying with tax rules and providing documentation.

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Anuradha Parasaram
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553 views2 pages

LTA Policy

The document outlines an organization's Leave Travel Assistance (LTA) policy. It states that employees can claim LTA once per year for themselves and dependents. To qualify, the trip must be a minimum of 5 days and employees must get approved leave. Claims are submitted with receipts to HR who processes payment. Any unused LTA amount is paid out after tax at year-end. The policy also describes relevant income tax provisions for LTA, including exemptions for two family trips in a four-year period, with differential amounts taxed. Employees are responsible for complying with tax rules and providing documentation.

Uploaded by

Anuradha Parasaram
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Leave Travel Assistance (LTA) Policy

(Effective from 1st Sept. 2006)

Eligibility: Eligibility of LTA amount is as per the Appointment or Review letter.

Availing LTA:
Employee can avail LTA once in every year. Year to be reckoned as Calendar Year (Jan Dec). Employee can claim LTA benefit for himself as well as his dependants, as mentioned in the companys record. The duration of the trip should be a minimum of 5 days. Employee should get their leave sanctioned prior to proceeding on the trip so as to avail the LTA benefit. All claims for availing LTA are to be made in the LTA Claim form and submitted to the HR department. The claim should be supported by actual receipts. If an employee fails to provide the supporting documents, he will not be entitled for the income tax benefit. HR Dept. will process the claim and forward to Accounts for verification and payment. The amount passed by the Accounts will be credited into the employees bank account along with the next pay cheque. If LTA is not claimed or the amount claimed is less than the eligibility, the LTA amount / balance amount will be paid to the employee after deduction of income tax, at the end of the financial year.

Income Tax Provisions for LTA: Leave Travel Assistance (LTA) provided by company is governed by the provisions of the Income Tax Act. Income Tax Act provides certain exemptions as well as guidelines for availing income tax benefit. The following are the provisions made in the Income Tax Act: The exemption is available for two journeys performed in a block of Four Calendar Years. The present block of four years commenced with calendar year 2002 and ends with calendar year 2005. The amount of exemption is limited, to the expenses actually incurred on travel by Train or by Air (Y Class), or by any other mode by the shortest route, whichever is less. Tax exemption can be claimed for amount actually spent for self and family as defined by the rules. Family in relation to individual includes:

Spouse and children of individual Parents, brothers and sisters of the individual or any of them, wholly or mainly dependant on the individual In case of children born after 1st October 1998, exemption is restricted to two surviving children. Restriction of two surviving children, however, does not apply to children born before 1st October 1998. The differential between amount actually spent on travel and LTA amount eligibility is fully taxable.

Compliance with Tax Provisions: The onus of complying with Income Tax provisions lies with the employee. The employee willing to avail LTA benefit, has to produce necessary documentary proof relating to travel expenses. Where necessary documentary proof is not produced, LTA amount being paid will be taxed fully. For any clarifications, please contact HR.

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