Dear All,
Shall we consider LTA as earning head like HRA, Personal Allowance ,Medical and others in montly gross salary while making salary break up?
Please appraise as i wanted to include in earning heads to avoid more liablity on employer side in point of view LTA is mandatory. Present company there is no such salary break has made till data as i am looking to forward to include LTA in earning heads.
Thanks & Regards,
Ananta Karad
9970065368
From India, Pune
3Shall we consider LTA as earning head like HRA, Personal Allowance ,Medical and others in montly gross salary while making salary break up?
Please appraise as i wanted to include in earning heads to avoid more liablity on employer side in point of view LTA is mandatory. Present company there is no such salary break has made till data as i am looking to forward to include LTA in earning heads.
Thanks & Regards,
Ananta Karad
9970065368
From India, Pune
Hi Anant :
Yes LTA is part of the gross salary.
For CTC below Rs.2.4 Lac, you have components like Basic, HRA, Conveyance etc.
For CTC between 2.4-7.5 Lacs, you can have components in addition to above LTA, Telephone reimbursements, books & periodicals, Medical allowance etc.
Hope the above info is helpful.
From India, Pune
Yes LTA is part of the gross salary.
For CTC below Rs.2.4 Lac, you have components like Basic, HRA, Conveyance etc.
For CTC between 2.4-7.5 Lacs, you can have components in addition to above LTA, Telephone reimbursements, books & periodicals, Medical allowance etc.
Hope the above info is helpful.
From India, Pune
Dear Prashant,
I am aggreed with you but i seen in many conpanies payslip and they have mentioned LTA in gross salary itself. So i need to drop LTA head and replace other head on same.
Please let me know LTA is mandatory to reimbuse on submitting proof( Travel Bill ond other docs) or it fine to consider in Gross salary?
Please appraise
Anant Karad
From India, Pune
I am aggreed with you but i seen in many conpanies payslip and they have mentioned LTA in gross salary itself. So i need to drop LTA head and replace other head on same.
Please let me know LTA is mandatory to reimbuse on submitting proof( Travel Bill ond other docs) or it fine to consider in Gross salary?
Please appraise
Anant Karad
From India, Pune
Dear Anant
LTA is an annual component and considered in the total annual payout (Cost-To-Company towards an employee at the end of the year). It need not be shown in the monthly salary heads as this is a one-time payment in a year or once in two or three or four year as it is claimed. It need not be shown in the monthly salary slip like basic, HRA, personal pay, etc. as you mentioned above.
However there are companies paying LTA monthly (to certain lower level staff) and show the same in the monthly salary slip. By paying this amount monthly you are adding liability only in ESI payments, for those who are earning monthly salary below 15K.
But objective of LTA is - it is an (A)ssistance to (T)ravel so as to take out some time (Leave) from the routine job and enjoy time with family. And as a practice, LTA is paid only against PL / EL taken for the purpose. This amount can be claimed every year or as you claim and is exempted from Income Tax liability (against travel expenses) twice in a 4-year block.
This exemption is only the amount you spent for TRAVEL out of the claimed amount by submission of the ticket for the claim purpose. It is not mandatory from the part of employer to collect the proof of your travel, it is employee answerable to IT dept in case they ask the explanation. However companies still collect travel tickets to avoid their head ache at a later stage when IT dept ask for details of payment. If you have not submitted travel proof to your employer, but claim tax exemption against it, you have to preserve the tickets and if IT dept ask for the explanation while you submit your docs to them, you have to furnish docs to them.
Hope I could give an idea about it.
Regards,
Suresh
From India, Pune
LTA is an annual component and considered in the total annual payout (Cost-To-Company towards an employee at the end of the year). It need not be shown in the monthly salary heads as this is a one-time payment in a year or once in two or three or four year as it is claimed. It need not be shown in the monthly salary slip like basic, HRA, personal pay, etc. as you mentioned above.
However there are companies paying LTA monthly (to certain lower level staff) and show the same in the monthly salary slip. By paying this amount monthly you are adding liability only in ESI payments, for those who are earning monthly salary below 15K.
But objective of LTA is - it is an (A)ssistance to (T)ravel so as to take out some time (Leave) from the routine job and enjoy time with family. And as a practice, LTA is paid only against PL / EL taken for the purpose. This amount can be claimed every year or as you claim and is exempted from Income Tax liability (against travel expenses) twice in a 4-year block.
This exemption is only the amount you spent for TRAVEL out of the claimed amount by submission of the ticket for the claim purpose. It is not mandatory from the part of employer to collect the proof of your travel, it is employee answerable to IT dept in case they ask the explanation. However companies still collect travel tickets to avoid their head ache at a later stage when IT dept ask for details of payment. If you have not submitted travel proof to your employer, but claim tax exemption against it, you have to preserve the tickets and if IT dept ask for the explanation while you submit your docs to them, you have to furnish docs to them.
Hope I could give an idea about it.
Regards,
Suresh
From India, Pune
Dear Suresh Sir,
Thanks for your advice..
But i have query pertaining to that we have near about 50 employees since one year and they are getting their salary in under 3 heads so i just joined this company and i have made changes in salary break up as BASIC, HRA, CONV., EDUCATION ALLW., MEDICAL ALLW.,PERSONAL ALLW.,and LTA and same gross salary has been bifurcated in these heads. SO shall i replace any other head instead of LTA...?
If we are not paid LTA monlty basis then we have to paid once in a year......is it mandatory under IT or other laws?
Please appraise me as am new in such things and i don't want to spoil my name and company name as well without increasing CTC of employees.
I am wa8ing to hear from you...
Thanks & Regards,
Ananta Karad
From India, Pune
Thanks for your advice..
But i have query pertaining to that we have near about 50 employees since one year and they are getting their salary in under 3 heads so i just joined this company and i have made changes in salary break up as BASIC, HRA, CONV., EDUCATION ALLW., MEDICAL ALLW.,PERSONAL ALLW.,and LTA and same gross salary has been bifurcated in these heads. SO shall i replace any other head instead of LTA...?
If we are not paid LTA monlty basis then we have to paid once in a year......is it mandatory under IT or other laws?
Please appraise me as am new in such things and i don't want to spoil my name and company name as well without increasing CTC of employees.
I am wa8ing to hear from you...
Thanks & Regards,
Ananta Karad
From India, Pune
-------------------
Dear friend,
LTA or LTC:
1) Many members have confirmed LTA being not a regular earning head doesn't deserve to be shown as a regular item in the Gross salary. This is fine. In rarest cases some employer pay some fixed amount towards LTA giving liberty to the employee concerned to submit bills/expenses details before 31st March to a/c. them for IT purpose instead of paying them once in a year or once in two years or four years. It depends upon what is the policy of the employer. Pl.go thro' a write up on LTA attached for further information.
And also you shall note that this is not a mandatory payment or part of a salary earning. In most cases it is a "Reimbursement of expenses incurred" by the employee concerned and hence not to be taxed.
You also should note IT Act does not prescribe any statutorily payable emoluments. IT Act only deals with what is to be taxed, when to be taxed and how much to be taxed, if and when paid or payable/accrued.
2) You have not mentioned anything about DA (fixed DA & Veriable DA) don't you have this component in your gross ? Do you consider City Compensatory Allw. ?
There are other allw. like - Risk allw, Clothing or Uniform allw, Project Allw. Incentive/ Performance Bonus, Night shift allw., Lunch(Canteen) allw. etc. and see attachment for many more.
From India, Bangalore
Dear friend,
LTA or LTC:
1) Many members have confirmed LTA being not a regular earning head doesn't deserve to be shown as a regular item in the Gross salary. This is fine. In rarest cases some employer pay some fixed amount towards LTA giving liberty to the employee concerned to submit bills/expenses details before 31st March to a/c. them for IT purpose instead of paying them once in a year or once in two years or four years. It depends upon what is the policy of the employer. Pl.go thro' a write up on LTA attached for further information.
And also you shall note that this is not a mandatory payment or part of a salary earning. In most cases it is a "Reimbursement of expenses incurred" by the employee concerned and hence not to be taxed.
You also should note IT Act does not prescribe any statutorily payable emoluments. IT Act only deals with what is to be taxed, when to be taxed and how much to be taxed, if and when paid or payable/accrued.
2) You have not mentioned anything about DA (fixed DA & Veriable DA) don't you have this component in your gross ? Do you consider City Compensatory Allw. ?
There are other allw. like - Risk allw, Clothing or Uniform allw, Project Allw. Incentive/ Performance Bonus, Night shift allw., Lunch(Canteen) allw. etc. and see attachment for many more.
From India, Bangalore
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