Dear Friends,
I have resigned from my previous employer and joined the new company on 15th Oct-2009. On settlement the old company paid me a LTA for 18.5 months(2008-09 and 6.5 months in 2009-10) @ Rs.1250/- p.m. Please let me know the tax treatment of LTA. Should i pay tax for Rs.23,125/- or can i claim any exemption. I have not travelled anywhere. I received this amount on Dec-2009 . Please advice me how much deduction i will get.
Thanks,
Prasanna
Dear Sir,
The entire amount (1,250 x 18.5 = 23,125) will be taxable in the year if any part of this had not been taxed in the earlier year on dur basis.
Further this payment appears to me as fixed in nature + you have not performed any journey so exemption u/s 10 cannot be claimed.
However relief u/s 89(1) can be claimed in respect of 11.5 months.(period prior to April 2009)
Rahul Dang & Associates-Chartered Accountants
Pune
CA Inter
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