Taxability of Monthly payment of LTA

This query is : Resolved

narendra (Querist)
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16 June 2010 Dear Friends
Greetings!

Can we receive LTA on monthly basis and get it exempt from I tax after submitting the proofs. If yes than what is the sanctity of a block of four years ( exemption once in two years) Is thers any Income tax circular/notification for the same.

Pl. guide it is urgent

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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16 June 2010 LTA need to be claimed after the expenses incurred, monthly LTA cannot be claimed, In a block you can claim two LTA trip exemption only

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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16 June 2010 Dear Ramesh,

What is the difference on payment of LTA by employer on monthly basis and once in a year, as it would be taxable unless the person availed leave for travel and claim the exemption for expenses incurred on travel.Please clarify.

Thanks Sanjay

http://www.thehindubusinessline.com/iw/2007/04/22/stories/2007042200611200.htm

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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16 June 2010 I have gone through the link you provided, thank for the same, my intention is generally employee opting LTA it will be allowed in his LTA unclaimed balance, it will not pay on monthly basis, since the exemption is allowed two times in a block, when the employee availing the LTA the same is adjusted the unclamied LTA balance, this is the practice genrally most of the people do,Incase monthly payment of LTA made, as per the act in the salary income the payment or accurral which ever is ealrier need to be taxed, if the employee is not incurred actual expenses but the payment recived automtically the payment will be taxable on receipt basis,this is the reason i suggested no monthly payment

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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17 June 2010 Dear Ramesh,

In our company we treat Leave travel allowance as a part of salary every month and deductions are available only against submission of bill as per provisions( same as HRA which you can receive as part of monthly salary but deduction is possible if actual rent incurred except twice in 4 year for LTA ) So I was little worried after reading montlhy LTA can't be claimed.

Thanks for your reply and clarification.

Cheers Sanjay

CA Vivek saraogi

CA Vivek saraogi (Expert)
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25 July 2019 As per Income Tax Act, Sec-10(5) - LTA can be claimed only twice in a block of four years. It is nowhere mentioned in the act that LTA needs to be paid annually.So, this means LTA can be paid monthly as well as annualy. Moreover, LTA can be claimed only after submitting the invoices to the employer and yes that should be part of your CTC.