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Government Introduces LTC Cash Voucher Scheme to Increase Consumer Demand

In wake of COVID-19 pandemic, the Finance Minister has issued a press release dated October 12, 2020, regarding the tax-exempt Leave Travel Concession (LTC) cash voucher scheme to boost up consumer demands.

Finance Minister has introduces the biggest incentive for employees to avail the LTC Cash Voucher Scheme is that in a four-year block ending in 2021, the LTC not availed will lapse, instead, this will encourage employees to avail of this facility to buy goods which can help their families.”

 

Central Government employees get LTC in a block of 4 years in which air or rail fare, as per pay scale/entitlement, is reimbursed and in addition, Leave encashment of 10 days (pay + DA) is paid. But due to COVID-19, employees are not in a position to avail of LTC in the current block of 2018-21.

 

Therefore, the Government has decided to give cash payment in lieu of one LTC during 2018-21, in which:

Full payment on Leave encashment; and

Payment of fare in 3 flat-rate slabs depending on class of entitlement

Fare payment will be tax free

An employee, opting for this scheme, will be required to buy goods / services worth 3 times the fare and 1 time the leave encashment before March 31, 2021.

 

The scheme also requires that money must be spent on goods attracting GST of 12% or more from a GST registered vendor through digital mode. The employee is required to produce GST invoice to avail the benefit.


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