Leave Travel Concession, is a type of salary component that allows to employees to receive concessions while traveling with their family. In this COVID-19 pandemic, most government employees are not in the condition to avail LTC for traveling. Keeping that in mind, the Finance Ministry announced the Leave Travel Concession scheme on October 12, 2020. Earlier, the Leave Travel Concession scheme, which was targeted for the central government employees, is now cover non-central government employees as well.
Other most important points are related to the Leave Travel Concession scheme are:
• Leave Travel Concession scheme comes with benefits for government employees. Earlier, they only had the option to get the previous Leave Travel Concession benefits on travel expenses or forgo the amount.
• Leave Travel Concession scheme is related for the current block of four years, i.e., 2018 – 2021.
• The employees have the option to receive a cash equivalent of LTC fare and related leave encashment without traveling under the LTC scheme.
• The cash allowance under Leave Travel Concession cash voucher scheme is subjected to a limit of Rs. 36,000 per person in the form of deemed LTC fare (round trip) to the government employees. It is also eligible for tax exemption.
• Purchase of goods and services should be made from a GST registered seller to get the benefits of L Leave Travel Concession scheme.
• Those who have chosen to pay income tax under the new tax regime are not eligible for LTC scheme benefits.
• Employees should spend minimum three times the deemed Leave Travel Concession fare during the period to receive the full amount under the Leave Travel Concession scheme.
Benefits for Employees Covered Under LTC Scheme
There are several benefits of Leave Travel Concession scheme for employees under state and central government employees.
• The Leave Travel Concession cash voucher scheme is meant to motivate employees to avail the Leave Travel Concession for the current four-year ending 2021, which will otherwise lapse if not available on travel expenses.
• They will receive a cash payment under the Leave Travel Concession scheme, which includes full payment of leave encashment and tax-free fare payment as defined in the three flat-rate slabs.
• The admissible payment under Leave Travel Concession scheme will be restricted to the total package of an employee, i.e., deemed fare and leave encashment as admissible under Leave Travel Concession rules.
• TDS will not be deducted when an employee reimburses the benefits as defined under the Leave Travel Concession scheme.
• The advantage of this special cash voucher scheme will be settled within the current financial year provided the invoices of purchases of goods and services are submitted on time.
• The allowance payable under LTC scheme is non-taxable as per the defined area.
Blog By :-
Mr. Ravi Saini
Assistant Professor, Biyani Group of Colleges
Department of Commerce
