Good News: Private companies and state government employees will also get the benefit of LTC scheme

New Delhi: The Modi government today took a major decision which will benefit private companies and state government employees who were not covered under the LTC cash voucher scheme. The CBDT today said that it has also decided to exempt employees of private companies and all state governments from income tax on cash payments equal to the approved LTC fare, as was done for central government employees. Accordingly, a maximum of Rs 36,000 will be exempted from income tax. However, some conditions have to be met for it.

The CBDT said that employees will get this exemption in income tax only when they opt for this option instead of LTC for 2018-19. At the same time, it has been said that the employee has to spend at least 3 times the valid LTC fare on the purchase of items which are subject to at least 1 per cent GST. These payments will have to be made digitally between 12 October 2020 and 31 March 2021. The employee should also have a voucher with GST number and proof of how much GST he has paid.

Earlier, the central government had made a major change in the rules of leave travel concession. Under which central employees no longer need to travel or take leave. Employees have been offered a special package instead of travel fare during Block 2018-21. The benefit of Leave Travel Concession or Leave Travel Allowance is available only when the employee has taken leave and traveled. So it is necessary to travel to apply for LTC. It will not be valid for LTC if leave is not taken. That is, if the employee does not go for a walk, he does not get the full benefit of the scheme. But in view of the Koro epidemic this year, the central government has announced cash vouchers under the LTA scheme this year. Under which employees will have to buy goods equal to 3 times the fare of railway or air travel instead of holidays or avail any service. means, He can also take advantage of tax savings without having to travel. GST on goods purchased should be more than 12 per cent. The employee can purchase such goods through cash voucher scheme.

The central government has now extended the scheme to private companies and state government employees.