The government has announced a special package in lieu of Leave Travel Concession (LTC) fare for the employees of the Center.
The government has made some announcements to increase consumer spending and to compensate those customers who are unable to travel due to the Coronavirus epidemic during this financial year. The government has announced a special package in lieu of Leave Travel Concession (LTC) fare for the employees of the Center. Under the LTC Cash Voucher Scheme, cash equivalent to LTC will be paid through reimbursement, including leave encashment and LTC rent. Employees can take advantage of this scheme in that situation if they choose it in lieu of an LTC between 2018-21.
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. And the amount will have to be spent on goods that have a GST of 12 percent or more and will have to be purchased from the GST registered vendor through digital medium.
Tax experts say that due to the epidemic many employees could not travel and this year they will not be able to claim leave travel exemption. So this special package gives the employees a chance that they can claim for it.
Who will benefit from the special package in lieu of LTC?
The 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.
How to calculate special package instead of LTC?
Special package in lieu of LTC shows the expenses of the employees. So if the employee spends the entire amount of the leave encashment and 3 times the LTC rental (stated slab), the amount of reimbursement 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:
So if the employee has a plan to spend something, such as if he has to buy some goods in the coming festive season, then he can choose this scheme.
(Story: Sanjeev Sinha)