LTC scheme exemption

Hi All,

If the employee does not have LTA component in pay structure. can they claim LTC exemption?

if not, what are the options for those employees?

Please suggest

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LTA can be claimed

If it is part of monthly pay and reflect in the pay slip

Also can claim as a one time if it is included in the CTC

2 Likes

Hi Anushri,

It differs from company to company. Your company will have FBP (Flexi benefit policy) as a part of payroll policies.

Please reach out to your HR for any such policies. You have to earn LTA as a part of gross salary to claim the benefit u/s 10(5).

The LTA earned by each employee is uploaded as information in Form 24Q - Salary e-TDS Return filed by your company to the Government. So, it’s a chain of processes to be followed and greytHR can help you with this.

You can read the blogs here for more insights:

For employees who have not earned LTA till Feb 2021 as a part of Salary - has an option to earn LTA in March 2021 to the extent available as per company’s internal policies.

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Please let me know if LTC exemption calculation is correct.
Amount spent on resort stay by self and eligible family members = 31,270
LTC benefit availed can be = 31,270 / 3 = 10,423
Is it correct?

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Hi, Yes, it is correct

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LTA exemption is available only for the amount actually incurred on the performance of such travel. You cannot claim LTA benefit for a resort stay!!

Please refer to the rule of income tax below.

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LTA has to be paid as part of salary. If it is not paid in the salary he will not get exemptions.

However as a practice many companies will adjust the special allowance portion and show it as LTA whenever there is a claim from employees. This is not a suggested practice but it has been followed by many.

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