What is ltc cash voucher scheme?
Last Update: April 20, 2022
This is a question our experts keep getting from time to time. Now, we have got the complete detailed explanation and answer for everyone, who is interested!Asked by: Ms. Alison Miller
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The LTC Cash Voucher Scheme is a replacement for the original leave and travel concession to employees in a year. It comprises of two parts – leave encashment and travel allowance. ... The scheme enables employees to claim tax exemption on leave encashment and travel allowance by fulfilling other conditions.
How does LTC cash voucher work?
The LTC cash voucher scheme is a new initiative by the Indian Government to incentivise consumption. In this scheme, the employees will receive an equivalent sum of their eligible LTC fare as a cash payout that is exempt from tax. How much every employee receives is based on their individual allowed LTA limit.
Can I claim LTC cash voucher?
In October 2020, due to the covid-19 pandemic, the government announced an LTC cash voucher scheme that allowed salaried taxpayers eligible for LTC/LTA to claim the allowance tax exempt without travelling by purchasing goods and services as per the scheme's conditions.
What is LTC cash voucher scheme for private sector?
The guidelines of the LTC scheme for private sector employees provide a maximum benefit of Rs 36,000 per person. In case the amount spent is less than 3 times the eligible amount, the exemption will be allowed proportionately.
How can I avail LTC cash voucher scheme?
Invoices of goods and services availed with GST rate not less than 12 per cent can also be claimed under the scheme. The payment of the goods or services from the registered GST vendor is required to be done through digital mode. > To avail for the package, an employee should opt for both leave encashment and LTC fare.
LTC Cash Voucher Scheme. Should you go for it? : Pankaj Mathpal
Who can avail LTC cash voucher?
To avail of the benefit under this scheme, employees are required to submit bills for purchases made between 12 October and 31 March. The amount required to be spent is equivalent to three 3 times the deemed LTC fare. Bills of goods and services with GST of ₹12% or above can be claimed under the scheme.
Is LTC cash voucher scheme extended?
Deadline for submission of bills or claims for benefits under the LTC Special Cash package scheme has yet again been extended. ... However, the payment for the purchases should have been made from the date of issue of the LTC Cash Voucher Scheme Order dated October 12, 2020, till March 31, 2021.
How is LTC cash voucher calculated?
- Leave encashment (1,38,500 x 1.17) x10/30 = Rs. ...
- Fare Value: Rs. ...
- Total Value: = Rs. ...
- Amount to be spent for full cash benefit = Rs. ...
- (a) Share of Leave Encashment in total = 54,015 X 100 / 2,94,015 = 18%
- (b) Share of Fare in total = 80,000 X 100 / 2,94,015 = 27%
What is LTC salary?
Leave Travel Concession (LTC) is nothing but a type of salary component where your employer is providing some yearly benefit to travel with your family. Usually it is mentioned as yearly component but will be paid on monthly wise. This facility will be availed to only “Family” members.
Is LTC cash voucher scheme beneficial for private sector employees?
Tax Exemption under the LTC Cash Voucher Scheme
The LTC scheme was first devised for the Central Government employees; it was then extended to benefit the private sector employees. Now, as per the guidelines, a private sector employee can receive a maximum benefit of Rs. 36,000.
What are cash vouchers?
A cash voucher is a standard form used to document a petty cash payment. When someone wants to withdraw cash from the petty cash fund, that person fills out the cash voucher to indicate the reason for the withdrawal, and receives cash from the petty cash custodian in exchange.
Is LTC allowed now?
Shalini Jain, Tax Partner – People Advisory Services, EY India says, "The LTC Cash Voucher Scheme introduced in October 2020 to boost consumer spending is now ratified as part of the Income-tax Act. ... ii) Purchases must be made during the period between October 12, 2020 and March 31, 2021.
Can I take 2 LTC a year?
(ii) Two LTC in a calendar year is permissible. If the Hometown LTC of the period 2014-15 is availed in grace period in 2016, in the same year, Any Place in India LTC or Home Town LTC of the two year block of 2016-17 can be availed.
Can we avail LTC in 2020?
2020 and should have an invoice. For those officials having three hometown LTCs and one all India LTC, can they avail special cash package for year 2020 in 2021 (up to 31.03. ... An official may avail LTC for 2021 in 2021 provided the same has not been foregone in lieu of the benefits of the said scheme.
Is Tatkal ticket allowed for LTC?
Travel by Premium trains/Premium Tatkal trains/Suvidha trains is now allowed on LTC. Further, reimbursement of tatkal charges or premium tatkal charges shall also be admissible for the purpose of LTC.
Is LTC tax free?
LTC which could not be spent is taxable in the hands of employee. ... Thus, the Government has provided for Income tax exemption on account of value in lieu of Leave Travel Concession whereby a salaried employee can claim tax exemption merely on purchase of certain goods or services by the employee or their family members.
Is LTC part of salary?
Example If LTA granted by employer is Rs 50,000 and actual eligible travel cost incurred by employee is Rs 30,000, exemption is available only to the extent of Rs 20,000 and balance Rs 20,000 would be included in taxable salary income. Procedure to claim LTC is generally Organisation specific.
How many days before we can apply for LTC advance?
LTC advance can be drawn 60 days before the proposed date of outward journey: - Under Central Government Rules, a Government servant can draw advance in respect of the journey proposed to be performed under the Leave Travel Concession scheme by himself and/or by members of his family 60 days before the proposed date of ...
How is block year calculated for LTC?
For the purpose of LTC, block years are defined for two years starting January 1st of an even year (e.g. 2006) to December 31st of an odd year. Thus the current block year is 2006-07.
How leave encashment for LTC is calculated?
- Earned Leave = [(Basic Salary + DA) / 30] x No of days.
- Hal Pay Leave = [(Half Pay Leave Salary + DA) / 30] x No of days.
How can I claim LTC in Port Blair?
LTC for Port Blair and other islands in Andaman can be claimed by submitting the filled LTC form along with proof of travel to your HR or accounts department. The claim needs to be a valid travel to the destination that you have mentioned in your flight tickets.
What is leave travel concession in India?
Leave Travel Concession (LTC)
Under LTC, only the travel fare of the shortest route in permitted mode and class of an employee and his/her family is reimbursed. To avail the benefit, the employee has to take leave for the journey period.
What is the full form of LTC?
Leave Travel Concession (LTC) is granted to Central Government employees for travel to various parts of the country and home as well. The number of home travel visits allowed are two.
How much LTC can I claim?
Under the LTC cash voucher scheme, travel expenses up to ₹36,000 per person can be claimed as deduction. There are two more slab rates of ₹20,000 and ₹6,000 depending on the employees' entitlement in case of government staff.
What can be claimed under LTC?
- Buy goods/services worth three times the amount of fare/LTA received;
- The money on goods/services must be spent before March 31, 2021;
- The money must be spent on goods attracting GST of 12 per cent or more from a GST registered vendor;