Covid-19 pandemic created unpredictable and unimaginable conditions in the country. It brought multiple types of challenges in the life of people. Covid-19 broke many people socially, physically, economically, and physically. To balance economic conditions, the government has introduced many schemes. The government also provided many relaxations to individuals, such as relaxation in repayment of loans, the extension of various due dates, etc.
According to the Income Tax Act 1961, two round trip journeys in the period of four years are eligible for tax benefits called Leave Travel Concession/Allowance (LTC/LTA). As employees are unable to travel in the period of 2018-2021. The government got aware of this fact and introduced a new scheme called the LTC cash voucher scheme.
LTC Cash Voucher Scheme
The scheme is quite innovative and got introduce to balance the social and economic needs of the economy and taxpayers. The important aspect of this scheme is that, even if any taxpayer does not travel anywhere. Then also the person is eligible to avail of the scheme. According to this scheme, if a taxpayer spends three times of eligible LTC/LTA. The person will be eligible to receive LTC/LTA. Condition is, that person has to do the purchase of goods or services which attract 12% GST. And also, the payment has to be done through digital mode only. The bill should be named under the employee or eligible family member for LTC/LTA. The transaction has to be done between the period from October 12, 2020, to March 31, 2021.
The scheme would not be eligible for the employees who have availed of the new concessional personal tax regime.
To implement the scheme in the private sector, employers need to set up a process to verify the invoices submitted by the employees.
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