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Finance Minister Nirmala Sitharaman Monday announced two sets of measures to generate consumption demand and boost capital spending in the economy. The measures announced by the government, along with participation of states and the private sectors, are, according to the government, projected to create “additional demand” of Rs 1 lakh crore in the economy. Sitharaman said supply constraints in the economy have eased, but consumer demand is still affected.
The ministry has decided to allow government and private sector employees to use their Leave Travel Concession tax-free benefit for various types of purchases subject to certain conditions while an interest-free festival advance of Rs 10,000 is being given to government employees. Measures have been announced to step up capital expenditure by the Centre and the states.
what is ltc cash voucher
The government on Monday announced that Central Government employees will be provided tax benefits on LTC component without them having to actually travel. These employees would, however, be required to spend three times of the LTC fare component for purchasing items that attract 12 per cent or more GST. What this effectively means is that if your fare component of LTC is Rs 40,000, you need to spend Rs 1.2 lakh on goods that fall in 12% or more GST slab in order to save tax on Rs 40,000.
Overview Of LTC Cash Voucher Scheme
|Name||LTC Cash Voucher Scheme 2022|
|Launched by||Finance minister Nirmala sitharaman|
|Objective||Providing cash vouchers for travelling and buying items|
|Beneficiary||Central Government employees|
LTC Cash Voucher Scheme New Update
Previously exemption in Income tax under LTC Cash Voucher Scheme is available only for the Central Government employees. On 29th October 2020, the income tax department had extended the income tax exemption for non-Central Government employees also. So that the consumer can spend money which will ultimately increase the demand in the market. The non-Central Government employees include the employees of State Government, public sector enterprise, bank and private sector.
Benefits Of LTC Cash Voucher Scheme
- Buy goods and services worth three times the tax-exempt amount paid before 31.3.2021.
- Spend the money on buying items attracting GST of 12% or more from GST registered vendor and purchase must be in digital mode
- GST invoice will have to be produced.
- Scheme open to private sector wherever the employers currently offer LTC. Scheme also open to PSUs, PSBs and state government employees.
- Payment of LTC fare in 3 flat-rate slabs depending on class of entitlement of government employees.
Applicant must follow the following eligibility criteria while applying for the scheme:-
- The applicant must be a resident of India
- An applicant must be a working Central Government employee
- The applicant can also be a state government employee
- The above scheme will be available for central government and PSU employees.
- However, the finance minister requested all the private companies and state governments to implement the same for their employees.
Benefits Of LTC Cash Voucher Scheme
The main aim of the government by launching the LTC Voucher Scheme is to give proper facilities to all of the Central Government employees but also this scheme will help in the economical flow of the country. The employees will be given the travel expense but they still need to spend three times the travel expense voucher that they are provided by the concerned authorities of the finance minister of the country. The employees if given 6000 LTC fare travel voucher then they need to spend 18000 rupees on the non-food items under 12% GST. This will help in the economical flow of the country and also the people will be helping in generating more cash in the economy.
Deemed LTC Fare
The number of LTC vouchers that the employees will get plus the value of these vouchers are as follow:-
|Employees who are entitled to business class of airfare||Rupees 36000|
|Employees who are entitled to an economy class of airfare||Rupees 20000|
|Employees who are entitled to Rail fare of any class||Rupees 6000|
LTC Cash Voucher Scheme Registration
There is no additional information regarding LTC Cash Voucher Scheme Registration is available now. We will update here each information as soon as the central government will announce it.