LTC Cash Voucher Scheme 2020: The employees opting for LTC scheme will have to buy goods or services before 31 March 2021, which is equal to 3 times the rental and leave encashment cover. Let’s know all the things related to it
New Delhi: The government has recently announced LTC cash voucher scheme for government employees and private sector employees. If you want to take advantage of LTC / LTA then you can buy some goods using that money. The employees opting for this scheme will have to buy goods or services before 31 March 2021, which is equal to 3 times the rent and the leave encashment cover. Apart from this, the amount will have to be spent on goods which have a GST of 12 per cent or more and will have to be purchased from the GST registered vendor through digital medium.
Know how much tax will be deducted under LTC Cash Voucher Scheme and how beneficial is for you here-
According to tax expert Gauri Chadha, if you are signing a contract or taking an offer, then it is important to read the term and condition. So this benefit government has given to the public, this is a good opportunity to save tax, but before that you need to know what it is a beneficiary for-
1. Government employees can avail LTC facility twice in 4 years.
2. Apart from this, government employees do not have to pay tax on LTC.
3. Private sector employees also get LTC facility 2 times in 4 years.
4. In the absence of LTC facility, the company pays the arrears after tax deduction.
5. Under the new scheme, you will get tax rebate only after spending three times more than the leave encashment and LTC.
6. Apart from the money received from LTC, you have to buy goods worth 3 times
7. Apart from which the GST rate is more than 12 percent
8. GST bill will also be presented to the employees.
9. Shopping must be done before 31 March 2021.
Tax Expert Gauri Chadha on CNBC Voice could not travel due to Corona epidemic said that due to the epidemic many employees could not travel and this year they would not be able to claim leave travel exemption. Therefore, the government has brought out this special package for employees. Through this, he can claim for tax exemption.
3 lakh rupees will have to be spent at
this time, at this time you will have to spend 3 lakh rupees to save tax of 30000 rupees. At the same time, earlier you had to spend only 1 lakh rupees for the tax rebate of 30 thousand rupees.
Who can take advantage of this scheme?
This scheme is for the employees of Central Government, Public Sector Banks (PSBs) and Public Sector Undertakings (PSUs). However, according to the notification, the state government and private sector employees who are currently eligible for LTC will be approved for tax concession.
New option found to avoid corona virus infection
Under this scheme, central employees (Central Govt. Employees) can visit their hometown or other place twice in a span of four years. For this, these employees will be eligible for LTC and Leave Encashment for 10 days leave. Employees will not have to pay tax on ticket expenses, while tax will be payable on payment of leave. Since, amidst the corona virus epidemic, people are still hesitant about travel. In such a situation, the government has given these employees a special option to take advantage of this scheme. Employees will be entitled to receive cash equivalent to LTC rent and leave encashment. However, the government has also put some conditions for this.
What did the Finance Ministry say
The Finance Ministry has written about this in a detailed way, ‘LTC of the government is different from Leave Travel Allowance (LTA) in the corporate sector. A person claiming LTC will be considered eligible only when he / she actually travels. If they do not travel, then this amount will be deducted from their payment and disciplinary action can be taken on them. They do not have the option to keep this amount and pay the income tax due on it.
Earlier there were only two options
Under the government system, employees previously had two options. The first is that they travel and spend. This included the cost of hotel, food etc. They had the other option that they would not get the benefit of this scheme if they do not claim within the due date. But, now a third option has been given to these employees. That is, the employees can use this amount for any other expenditure besides travel. In the current era of the Kovid-19 epidemic, the government has offered this option considering the risk of infection during travel.
Less impact of lockdown on savings of government employees
The ministry also said that despite the lockdown, there was little impact on the savings of government employees. There is no cut in the salary of government employees. In such a situation, government employees are in a position to spend, which will increase the demand in the economy. They will have the option to take advantage of LTC scheme to spend on the item or service of their choice and need.
How to calculate special package instead of LTC
Special package in lieu of LTC shows the expenses of the employees. Therefore, if the employee spends the entire amount of the leave encashment and 3 times the LTC rental (stated slab), the reimbursement amount will be equal to the total leave encashment and the total LTC rent. If he spends less, then the amount of reimbursement will be fixed according to the same limit. It can be easily understood as follows: So if the employee has a plan to spend, such as if he has to buy some goods in the coming festive season, then he can choose this scheme.
How long can I spend the amount
Every four years, the government gives LTC to its employees to travel to any destination of their choice. Apart from this, an LTC is given to them to visit their home state. Sitharaman said that due to the Kovid-19 epidemic, it is difficult for employees to travel this year. In such a situation, the government has decided to give them a cash voucher. It will have to be spent by 31 March 2021.
How much will the government spend
The government will spend Rs 5,675 crore for LTC. At the same time, central public sector undertakings and banks will have to spend Rs 1,900 crore. The Finance Minister said that this step will generate a demand of Rs 19,000 crore. If half the states followed this guideline then a demand of Rs 9,000 crore would be created.
