Central employees will get a big relief on the LTC cash voucher scheme.
The Modi government has given a big relief to the central employees after the economic losses during the Koro period. The government has notified the LTC Cash Voucher Scheme in the budget in the ‘Travel Allowance Space Scheme’ for government employees. This means that central employees will no longer have to pay TAX on this amount.
What is Cash Voucher Scheme?
The scheme was announced on 12 October 2020. Earlier this scheme was for central employees only but now private and other employees have also been included in the scheme. In her budget speech, Finance Minister Nirmala Sitharaman said, “LTC has been kept on tax exemption due to the Covid 19 epidemic. The government hopes that the scheme will also bring money into the pockets of government employees and when there is money in the pockets, it will also spend it. This whole system will benefit the economy. Employees who have not been able to avail of LTC due to Corona will be given the benefit of the Cash Voucher Scheme in the ‘Travel Allowance Space Scheme’.
What is LTC?
Central employees get LTC in 4 years. With this allowance, they can travel anywhere in the country once in the meantime. During this time the employee gets a chance to go to his hometown twice. The travel allowance also covers the cost of air travel and rail travel. Employees also get 10 days PL (Privileged Leave).
Guidelines for Cash Voucher Scheme
Employees will be given cash instead of LTC.
Travel fares will also be paid according to the grade of the employee.
Rental payments will be completely tax-free.
An employee taking advantage of this scheme will have to spend three lots of rent.
Payment for leave encashment will have to be exactly the same.
Must be spent before March 31, 2021.
Employees will have to spend on items that incur GST of 12 percent or more.
Only services or items must be purchased from a GST registered vendor or merchant.
Payment for services or items must also be made digitally.
Receipt of GST will have to be given while claiming travel allowance or space allowance.