Leave Travel Allowance (LTA)
Definition
An allowance Indian employers pay to cover an employee's travel costs within the country, which can be exempt from tax subject to conditions and limits under the old tax regime.
Related Terms in Payroll
Form 12BB
A declaration an Indian employee gives their employer of the deductions and allowances they intend to claim — such as HRA, LTA and investments — so the employer can compute TDS on salary correctly.
Full and Final Settlement
The process of settling all dues when an employee leaves — unpaid salary, leave encashment, gratuity and any recoveries — in a single closing calculation. It clears both parties' outstanding obligations.
Payroll Tax
Taxes and contributions levied on wages, which may be withheld from employees, borne by employers, or both. They typically fund social-security and related programmes.
Withholding Tax
Tax an employer or payer deducts from a payment and remits to the authorities on the recipient's behalf, so tax is collected as income is earned rather than only at filing.
Stop memorising terms — let HelloBooks do the work
AI-assisted bookkeeping that handles invoicing, GST, reconciliations, and reports automatically. Free to start.