Leave Travel Allowance

Transcription

1 Leave Travel Allowance

2 Table of Contents Objective:...3 Eligibility:...3 Scope:...3 Quantum of LTA...3 Advance for LTA...3 Payment...4 Claiming income-tax exemption on LTA...4 Claiming LTA with tax deduction at source...4 Definition of Block of four years...4 Definition of a family...5 Quantum of exemption under the income tax act...5 Carry forward of LTA entitlement...5 Accumulation of LTA...6 Note: P a g e Leave Travel Allowance

3 Objective: To streamline the process of LTA Claims by the employees. Eligibility: All Management staff in the Officers & Above Grade will be entitled to LTA. LTA will be calculated on a calendar year basis (i.e. January to December every year) and on a pro-rata basis for the part of the year. Employees retiring / resigning during the course of the year shall be eligible for pro rata LTA up to the date of their retirement/ last working day. In case employee resigns before completion of one year, pro rata LTA up to the Last working day will be paid after deduction of applicable Income Tax along with Full & Final settlement. Scope: All management staff across Raymond Group as per terms and conditions of employment. Quantum of LTA The LTA will be paid at the rate of one month s Basic + Cola (where applicable) applicable in the month of payment 33% Basic + Cola (where applicable) Advance for LTA An advance for LTA can be availed for booking tickets, up to a maximum of 2 months in advance from the date of travel by making an application to HR Dept with a copy of the approved leave application. The advance will be paid up to 70% of entitlement. Employee has to complete Journey within 3 months from the date of advance taken & & claim form along with supporting documents has to be submitted to Business HR/ Location HR in subsequent month. The balance amount shall be paid on production of travel tickets failing which the advance will be recovered from the salary in the subsequent month. 3 P a g e Leave Travel Allowance

4 Advance LTA cannot be availed to claim Taxable LTA. For e.g.:- If advance LTA is availed in the month of February on 1 st February, journey has to be completed before 30 th April & claim has to be submitted on or before the cut-off date for May salary processing i.e. 13 th May falling which advance will be recovered from May salary. Payment In case an employee leaves the service during the year (after receipt of LTA), pro-rata amount will be recovered from his/her full and final settlement. Claiming income-tax exemption on LTA Minimum 4 days Privilege Leave to be availed by the employee and he/she has to update the claim online on Talent Maximus Web Portal and he/she has to take printout before cut-off date. Duly signed claimed form along with Proof/Enclosures in the prescribed format has to be submitted to Business HR/Location HR in the reimbursement boxes set up at each location on or before cut-off date. Any two journeys (LTA) can be claimed for tax exemption in a block of four years beginning from January LTA for self and family is admissible for tax exemption. Income tax exemption on LTA is applicable only in case of domestic travels. Claiming LTA with tax deduction at source No leave will be required for claiming LTA with tax deduction. Taxable LTA claim has to be submitted online through Talent Maximus and a printout has to be submitted to Business HR for processing before cut-off date. Definition of Block of four years Under the present Income Tax Rules, a period of four calendar years beginning from the Year 2014 to 2017, 2018 to 2021 and so on has been defined as a block of four years during which employee may avail tax exemption in any two years. E.g.:- 1. For a block period of 2014 to 2017 an employee can combine LTA of and together and claim LTA exemption on the same subject to submission of relevant supporting documents. 2. If an employee claims non-taxable LTA separately for 2014 and 2015, then he cannot claim tax exemption on LTA of 2016 and They will be paid subject to deduction of tax as applicable. 4 P a g e Leave Travel Allowance

5 Definition of a Family Family includes: The spouse and children of an individual; and The parents, brothers and sisters of an individual or any of them, wholly or mainly dependent on the individual. Quantum of exemption under the income tax act Quantum of Exemption The amount of LTA for self and family permissible under the Income Tax Act for exemption is as follows: For journeys performed by Air: FULL FARE (ECONOMY CLASS) of any National Carrier by the shortest route to the place of destination or actual cost whichever is lower For journeys performed by Rail: Air-conditioned First Class Rail Fare by the shortest route to the place of destination or actual. For journeys performed by Road: The amount equivalent to Air-conditioned First Class Rail Fare, for the distance of journey by the shortest route, as if the journey had been performed by rail or whichever is lower. Documents required for Claiming Tax Exemption The following documents must be produced along with the prescribed form: Mode of travel Documents Rail Photocopies of railway tickets/ e-tickets Air Original Boarding Passes and ticket/e-tickets By own vehicle : Petrol Bills By Hired Car : Road Bill of operator Proof indicating the places visited Carry forward of LTA entitlement Accumulated LTA amount of last 2 years of a particular block can be carried forward to the next block for one journey. However, it is mandatory to claim reimbursement for this journey in the first calendar year of the new block in December before the cut-off date of online submission on Talent Maximus. So for the new block, a total of three journeys can be claimed for tax exemption. 5 P a g e Leave Travel Allowance

6 Un-availed LTA of previous block if any will be paid along with February salary of subsequent year /first calendar year of the new block (after deduction of applicable Income Tax). For e.g.:- In Block Period of , employees can carry forward and claim non-taxable LTA only for the year 2016 and 2017 in the next block period (i.e., Block period of ). These two years LTA can be claimed in 2018 before payroll cut-off date till December If not claimed then un-availed LTA of 2016 and 2017 will be paid in February 2019 salary subject to deduction of applicable income tax. Accumulation of LTA Accumulation of un-availed LTA is allowed up to two years within the block of four years specified under the Income Tax Rules. The current block is for the period of calendar year At the end of the block Unclaimed LTA amount for first two years will be paid along with February salary of subsequent year/first calendar year of the new block (after deduction of applicable Income Tax). For e.g.:- In block period of , if LTA of 2014 and 2015 is not claimed till the end of the block period, then it will be paid in February 2019 salary subject to deduction of applicable income tax. Note: The exemptions mentioned above under the Income-Tax Act are subject to change by notifications from the Central Government from time to time. Please write to for any queries related to GET /MT Lifecycle. Please note that any misinterpretation or misuse of the policy shall be treated as a Code of Conduct violation. 6 P a g e Leave Travel Allowance

7 Revision: Introduction Date 18 th June 2009 Revision Date 1 st January 2017 Revision Summary New joinee are now eligible to claim LTA on prorated basis for 1 st year of joining in the month of February of following joining year. Employee can view eligibility amount on TMI Portal once it get uploaded. 7 P a g e Leave Travel Allowance