LTC cash voucher scheme

LTC cash voucher scheme

The government announced a scheme offering tax-exempt payment of leave travel concession/allowance (LTC/LTA) to employees without the need for them to travel if the amount is spent as per specified conditions below. This benefit is available till March 31, 2021.

The announcement has come as an employee is not in a position to travel anywhere in India to avail the benefit of LTC/LTA in the current block of 2018-2021 due to the novel coronavirus pandemic.
·  Buy goods and services worth three times the tax-exempt amount paid before 31.3.2021.

  • Spend the money on buying items attracting GST of 12% or more from GST registered vendor and purchase must be in digital mode
  • GST invoice will have to be produced.
  • Scheme open to the private sector wherever the employers currently offer LTC. Scheme also open to PSUs, PSBs, and state government employees.
  • Payment of LTC fare in 3 flat-rate slabs depending on the class of entitlement of the government employees.

This is a one-time scheme and payment will be only in lieu of one LTC during the block of four years 2018-2021. This should help people to some extent as it makes one-third of their spending, as per specified conditions, tax-exempt. Basically, converting tax-exempt travel expenditure into tax-exempt consumer expenditure.

This scheme is an alternative of the Leave Travel Concession facility that is available currently. The benefits are available for both government and private sector employees.

 

 

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