To assist the staff, who had been unable to journey as a result of Covid-19 pandemic, declare the Go away Journey Concession (LTC) and to spice up the demand, that received crippled as a result of nationwide lockdown, the federal government has launched the LTC Money Voucher Scheme.
Beneath the LTC Scheme, workers are allowed to buy items and avail providers that entice GST (Items and Providers Tax) price of 12 per cent or extra in lieu of journey within the present Block of 2018-21.
To avail the profit, the staff should both journey or spend on items and/or providers until March 31, 2021.
If an worker chooses to journey, he/she’s going to get the permitted journey bills reimbursed. For presidency workers, it’s an extra tax-free incentive, whereas for personal sector workers, it’s principally claiming the a part of CTC tax free.
However, to avail advantages underneath the LTC Money Voucher Scheme, an worker has to spend 3 times the journey fare of the household as per the permitted slab in addition to the quantity of depart encashment to get profit on the quantity of journey fare and depart encashment. Once more, for presidency workers, it’s an extra tax-free incentive, whereas for personal sector workers, it’s principally claiming tax profit on the permitted quantity.
The slab per member of the family for an worker entitled for air journey in enterprise class is Rs 36,000, for these entitled for air journey in financial system class is Rs 20,000, whereas for workers entitled for rail journey is Rs 6,000.
Following are the comparability of the advantages underneath the 2 choices:
Go away Journey Concession (LTC)
- Beneath LTC, solely the journey fare of the shortest route in permitted mode and sophistication of an worker and his/her household is reimbursed.
- To avail the profit, the worker has to take depart for the journey interval.
- The worker might declare Go away Encashment (if out there) for the journey interval, however it will likely be taxable.
- Even when earnings of a authorities worker just isn’t taxable, he/she might get the journey bills reimbursed underneath LTC. Nonetheless, for many personal sector workers having non taxable wage, journey is immaterial as LTC is a part of their CTC.
LTC Money Voucher Scheme (LTC Scheme)
- Profit is out there solely on spending on items and providers that entice GST of 12 per cent or extra.
- Cost must be made in any mode apart from money.
- To get the profit, spending must be 3 occasions.
- No must take depart to avail the profit.
- The place depart encashment is out there, it’ll even be tax free.
- For many personal sector workers having non taxable earnings, there can be no profit underneath the LTC Scheme as solely tax exemption is offered on the permitted quantity.