LTC Cash Voucher Scheme 2020 for central govt employees (Circular, Notification, benefits, full form, leave travel concession)
The Leave Travel Concession cash voucher scheme has been introduced by Finance Minister Nirmala Sitharaman. The main idea is to boost economy that has been hit hard due to pandemic. However, the scheme is capable of generating demand of rupees 28000 crores as stated by finance department. As the employees or organized sector have been able to save during the pandemic, they should contribute for the benefit of deprived ones.
Government employees got the scope to save during pandemic and as a result of this, they should incentivize for the weaker sections.
What do you understand by LTC?
Salaried workers enjoy income-tax exemption in relation to some allowances like house rent, leave encashment, gratuity and leave travel allowance. However, as per section 10(5) of income tax 1961 act states about exemption of LTA that is offered to employees. The LTA will be given to employee if only he or she have traveled to place with families in India. This LTC facility is given every four years with reimbursement and leave encashment facility of 10 days.
What does LTC voucher scheme indicates?
As employees cannot avail of LTC during 2018-2021 spans, they can opt for cash against leave encashment including fare of the same as per the above said scheme. However, employee who wishes to get the benefits can purchase good or items worth three times of fare and 1 time of the leave encashment. However, it is applicable prior to 31st March, 2021. The money received is eligible to be spent only for items that has GST of 12% and above from registered vendor and they should collect appropriate GST invoice related to the purchase.
The total worth for the implementation of the scheme for PSBs is rupees 5, 675 crores and for PSUs, it is rupees 1900 crores. In addition, some tax concessions are offered for LTC tickets both for private sector and state government employees to enjoy such perks as detailed in the scheme.
Can private sector employees benefit from the scheme?
Yes, private sector employees are eligible to enjoy the scheme perks. For this, the companies should look after the policies and make changes as required. Modification is required in leave travel concessions in line with the latest tax benefits offered for the employees. This is also applicable for government sector employees and they can only get the benefit if only they purchase products or services as mentioned above.
Why such an initiative has been thought about?
Through different announcements, the supply constraints have been overcome and the poor and weaker sections are given suitable assistance for it. But consumer demand still requires a boost and for the same, the above said scheme idea has been announced by finance ministry. It is mainly aiming the deprived sections that have lost their jobs during pandemic and are facing great economic pressure during this time.
The idea of the scheme will help in handling expenditure better and bring in significant changes and also direct towards the increase in overall GDP of the country.
How festival advance scheme works?
The festival advance scheme is meant for non-gazette employees and it will be revived as a measure to help gazette employees.
Also, the central government employees will be given advance of rupees 10, 000 without any interests. It will be given as prepaid RuPay card that need to be spent within the span of 31st March, 2021. In addition, to cover up for the expense of festival advance, a total of rupees 4000 crores are required. The employees need to pay back the advance in interest free rate within 10 months.
How will scheme benefit economy?
Through the help of LTC boost plan, it can be expected to generate rupees 28000 crores for overall economy. From consumption of LTC component of employees under central and state government, it will boost GST collection by the second half of year and this expenditure should be complete within 31st March 2021.
However, to boost capital expenditure, there are three groups in state, one with north-eastern states of rupees 1600 crores along with Himachal Pradesh and Uttarakhand of rupees 900 crores, second group with 7500 crores and third group with total of rupees 2000 crores. The funds that need to be used by March of coming year can be used for different projects by the state mentioned.
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