LTC Cash Voucher Scheme
Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment + 3 times ticket fare, to buy something of their choice. The items bought should be those attracting GST of 12% or more. Only digital transactions are allowed, GST Invoice to be produced.
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.
Estimated cost of LTC Cash Voucher Scheme: For Central govt. : ₹ 5,675 crore; for PSBs & PSUs: ₹ 1,900 crore.
Also Read : LTC Cash Vouchers Scheme & Special Festival Advance Scheme for Government Employees – Finance Minister Announces Schemes
Tax concessions for LTC tickets available for state govt. & private sector too, if they choose to give such facility, these employees too can benefit
Indications are that savings of govt. and organized sector employees have increased, we want to incentivize such people to boost demand for the benefit of the less fortunate. On a conservative basis, we expect the LTC Cash Voucher Scheme to generate additional consumer demand in the range of ₹ 28,000 crore.
– Union Finance Minister Smt. Nirmala Sitharaman
Leave Travel Concession (LTC) Cash Voucher scheme
- Central Government Employees get LTC in a block of 4 years (one to anywhere in India & one hometown or two for home town)
- Air or rail fare, as per pay scale / entitlement, is reimbursed and in addition, Leave encashment of 10 days (pay + DA) is paid
- Due to Covid-19, employees are not in a position to avail of LTC in the current block of 2018-21
Also Read : LTC Cash Voucher Scheme for Central Government Employees – FINMIN Order
In lieu of one LTC during 2018-21, cash payment will be made :
- Full payment on Leave encahment 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
- Do so before 31st March 2021
Money must be spent on
- goods attracting GST of 12% or more from a GST registered vendor
- throught digital mode
- GST invoice will be required to be produced
Financial Boost to the Economy
- If Central Government employees opt for it, cost will be around Rs.5,675 crore. Employees of PSBs and PSUs will also be allowed this facility and the estimated cost for them will be Rs. 1,900 crore.
- The tax concession will be allowed for State Government/Private sector too, for employees who currently are entitled to LTC, subject to following the guidelines of the Central Government scheme
- Demand infusion in the economy by Central Government and Central PSE/PSB employees is estimated to be Rs. 19,000 crore approx. Demand infusion by State Government employees will be Rs. 9,000 crore.
- Additional consumer demand generated will be Rs. 28,000 crore