New Delhi, October 29: Income tax exemption under the 'LTC Cash Voucher Scheme' has been extended to non-central government employees, said the IT department on Thursday. Non-central government employees, who now can seek income tax exemption under the 'LTC Cash Voucher Scheme', include employees of state governments, public sector enterprises, banks and private sector. Dussehra Bonus For Non-Gazetted Central Government Employees Approved by Union Cabinet.
"In order to provide the benefits to other employees (i.e. non-central government employees) who are not covered by the above mentioned OM (the October 12 decision for central government employees) it has been decided to provide similar income-tax exemption for the payment of cash equivalent of LTC fare to the non-central government employees also," the government said. LTC Cash Voucher Scheme: Central Govt Employees Can Submit Multiple Bills to Avail Scheme Benefit.
The income-tax exemption to receipt of deemed LTC fare by a non-central government employee shall be allowed subject to fulfilment of the following conditions:
1- The employee exercises an option for the deemed LTC fare in lieu of the applicable LTC in the Block year 2018-21.
2- The employee spends a sum equals to three times of the value of the deemed LTC fare on purchase of goods/services which carry a GST rate of not less than 12% from GST registered vendors/service providers (‘the specified expenditure’) through digital mode during the period from the 12th of October, 2020 to 31st of March, 2021 (‘specified period’) and obtains a voucher indicating the GST number and the amount of GST paid.
3- An employee who spends less than three times of the deemed LTC fare on specified expenditure during the specified period shall not be entitled to receive full amount of deemed LTC fare and the related income-tax exemption and the amount of both shall be reduced proportionately as explained in Example-A below.
On October 12, the Finance Minister announced a number of measures to induce government employees to spend in the upcoming festive season, including an 'LTC Cash Voucher Scheme' and 'Special Festival Advance Scheme'. The LTC scheme provides central government employees allowance to travel a "once anywhere in India and once to hometown or twice for hometown visit" in a block of four years. Employees who pay income tax under the concessional tax regime won't be entitled to this exemption.
(The above story first appeared on LatestLY on Oct 29, 2020 10:57 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).