The corona epidemic is an unprecedented crisis and has not only presented challenges to the people financially but has also affected people socially. To meet the economic challenges, the government has provided many relief to the people, such as increasing the deadline of ITR, facilitating loan moratorium and relief in housing rules etc.
Under the Income Tax Act, 1961, workers get tax benefit in the form of Leave Travel Concession ((LTC) on the cost of commuting two trips between four calendar years (January to December). However, traveling during the Corona epidemic. If it is not possible, then the Central Government has introduced a special scheme LTC Cash Voucher Scheme for the current block 2018-2021. It will benefit government employees as well as private sector personnel.
This will benefit you
Not only can taxpayers benefit from LTC Cash Voucher Scheme, but it will also benefit the economy, it has been designed in this way. Under this scheme, you can take advantage of LTC even without traveling. However, some conditions have to be fulfilled for this.
- To take advantage of LTC, you have to spend an amount equal to three times of it.
- This expenditure will have to be incurred for those goods or services which fall in the GST slab of 12 percent or more.
- Payment must be in digital mode.
- The invoice should have the same name which is to take advantage of LTC Cash Voucher Scheme. However, it can also be taken in the name of those family members who are eligible for LTC.
- The expenditure should be from 12 October 2020 to 31 March 2021.
One can understand this with an example. Richa works in a leading IT company and cannot travel due to an epidemic. There are four members in his family and can take advantage of LTC of 80 thousand rupees. If she buys any goods like television, AC, mobile, fridge, etc. for three times, ie Rs 2.4 lakh, then she will get an allowance of 80 thousand without any tax. Had he not taken advantage of this scheme, since he would have had to pay a maximum marginal rate of 42.74 per cent, he saved 34 thousand rupees. If she did not take advantage of LTC cash voucher scheme, then she would have to pay tax of Rs 34 thousand on getting LTA of 80 thousand.
These people will not get benefit
The LTC Cash Voucher Scheme brought by the government will not benefit those people who have opted for the new Consensual Personal Tax Resume. Examinations and deductions have been removed in the new personal tax rules and the tax rate has been reduced.
Private sector workers can also take advantage of LTC Cash Voucher Scheme. This requires companies to verify vouchers submitted by the employee as part of a process; Such as GST rate, digital payment, name of the employee, time of invoice etc. However, it has not been clear yet that if you do not take the benefits of LTA, then it will be able to carry forward or lapse next year.
Also read- Calculate your special package under LTC Cash Voucher Scheme
Why take advantage of this scheme
In this way, this scheme can be a game-changer and can increase overall consumption in the current financial year. Apart from this, the GST collection will also increase. Apart from this, it is also a benefit scheme for taxpayers as they can also save tax on LTA amount and can also buy valuable goods. So if you travel or not, definitely take advantage of LTC Cash Voucher Scheme.