Exemption on Leave Travel Allowance
(LTA)
Purpose
This component calculates the tax exemptions applicable to Leave Travel Allowance (LTA).
Your organisation can give LTA to the employees in the following ways:
...
· By specifying an annual (normally, but not necessarily) amount for LTA and making payments against claims submitted by the employee.
· By giving the employee a certain amount as LTA on a monthly or a periodic basis.
For more information on LTA reimbursements, see the Claims section.
Integration
· Whenever an employee submits the travel tickets for LTA exemption as proof, you must create an Exemptions infotype (0582), LTA subtype record for the employee. You must create one record for every trip for which the employee is claiming an exemption.
· You can make the payments for LTA through the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) or Additional Off-Cycle Payments infotype (0267).
· You must update the Previous Employment Tax Details infotype (0580) with the following LTA Exemption details:
¡ The number of times the employee has claimed LTA Exemption in the current block of four years.
¡ Whether the employee has carried forward a trip for LTA exemption from previous block of four years to the current block.
· Payroll functions WPBP, P0014, P0015 and P0267 read the Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) and Additional Off-Cycle Payments infotype (0267), respectively for LTA and populates the Input Table with LTA wage types. The total amount of payments in the curent period is stored in the LTA reimbursement wage type (/3L1).
To read infotype 0582 payroll function (P0582) reads the Exemptions infotype (0582) and forms the Internal Table EXM.
To calculate LTA exemption amount payroll function (INLTA) reads the:
...
a. Input table and the CRT for the LTA wage types for the total LTA payments in the current financial year.
b. EXM for the total amount of the tickets submitted as proofs.
The lesser of the amounts in a and b above, is the total LTA Exemption for the financial year.
Features
...
· There is no LTA exemption amount limit stipulated by the government. An employee can get an exemption of the entire allowance amount.
· An employee can claim the LTA exemption for only two trips in a block of four years. The Begin Date and End Date of this block is maintained in the constants, LTA Slab Begin Year (LTABG) and LTA Slab End Year (LTAEN) respectively, of the table view Payroll Constants (V_T511K).
· An employee can claim the LTA Exemption for self and for the dependents.
· The employee has to submit the tickets as proof to avail of the tax exemption. The details of the declaration are populated in the Exemptions infotype (0582), LTA subtype.
· If the employee has not claimed the LTA Exemption for one or both the trips in the current block, LTA Exemption for one trip can be carried forward to the next block. But this Exemption has to be claimed in the first year of the next block, otherwise the LTA exemption that is carried forward lapses.
· Exemption against LTA is the lesser of:
...
a. Total LTA payments made for the financial year through Basic Pay infotype (0008), Recur. Payments/Deds. infotype (0014), Additional Payments infotype (0015) or Additional Off-Cycle Payments infotype (0267).
b. Total amount of the travel tickets submitted as proof of travel and entered in the Exemptions infotype (0582), LTA subtype.
You must populate the Exemptions infotype (0582), LTA subtype with the details of the travel tickets submitted as proof to avail of the LTA exemption.
Example
...
· An employee is eligible for an LTA of Rs.24,000 annually for the financial year 2002 - 2003. In the current block 2002 - 2005, he/she has carried forward one trip from the previous block. The employee submits the travel tickets of Rs.26,000 for the journey undertaken between the January 2, 2002 - January 19, 2002. The employee gets an exemption of Rs.24,000, which is the minimum of the eligible LTA and the travel tickets submitted as proof. This exemption is against the carry forward trip from the previous block.
· An employee is eligible for an LTA of Rs.36,000 annually for the financial year 2002 - 2003. In the current block 2002 - 2005, he/she has carried forward one trip from the previous block. The employee submits the travel tickets of Rs.20,000 for the journey undertaken between the January 2, 2002 - January 19, 2002. He/she also submits another set of travel tickets of Rs.15,000 for the journey undertaken between April 10, 2002 - April 28, 2002. The employee gets an exemption of Rs.35,000, which is the minimum of the eligible LTA and the total amount (Rs.20,000+Rs.15,000) of the travel tickets submitted as proof. This exemption is against the carry forward trip from the previous block and one trip of the current block.
See also: