Depart Journey Concession Money Voucher Scheme: Applicability, tax incentive – This is all you want to know This scheme is relevant to the LTC fare unutilised in the course of the block interval 12 months i.e. 2018-2021.The Novel Coronavirus (COVID-19) pandemic has been inflicting extreme disruptions within the economic system. Nevertheless, of late, issues are actually to lookup. With a view to revive the economic system by boosting shopper spending and growing capital expenditure by states, the Finance Minister (FM) has not too long ago introduced in varied fiscal help packages.One of many measures introduced to spice up shopper spending is the introduction of “Depart journey Concession (LTC) Money Voucher Scheme”.Key highlights of the LTC Money Voucher Scheme:1) ApplicabilityContents 1) Applicability2) Deemed LTC Scheme3) Riders linked to tax incentive4) IllustrationAs per the Workplace Memorandum (OM) dated 12 October 2020, by the Ministry of Finance, the above scheme is relevant to Central Authorities staff. Additional, by way of a press launch on 29 October, the ministry issued that the scheme would even be relevant to non-Central Authorities staff as nicely.Non-central authorities staff would come with staff of state authorities, public sector staff, banks and personal sector.2) Deemed LTC SchemeThe scheme permits money equal to LTC, comprising depart encashment and LTC fare of the entitled LTC, could also be paid by means of reimbursement, if the worker opts for this in lieu of 1 LTC in the course of the block interval of 2018 -2021. Attributable to COVID-19 and consequent journey restrictions and sustaining of social distancing, staff haven’t been capable of avail LTC within the present block interval of 2018-2021. Therefore, in its place, the above scheme has been launched.3) Riders linked to tax incentivea. This scheme is relevant to the LTC fare unutilised in the course of the block interval 12 months i.e. 2018-2021.b. The quantity each on account of depart encashment and fare shall be admissible if the worker spends –b.i. An quantity equal to worth of depart encashmentb.ii. An quantity 3 occasions of the worth of the deemed LTC farec. The above expenditure must be incurred on buy of products/ providers which carry GST fee of not lower than 12% from GST vendor/service suppliers. A few of the examples of products/ providers attracting GST @ 12% or extra are shopper items, readymade clothes, tv/ web/TV cable providers, and so forth.d. The cost to buy the above items/providers must be by way of digital mode solely.e. The above expenditure must be incurred in the course of the interval 12 October 2020 to 31 March 2021.f. The worker ought to acquire a voucher indicating the GST quantity and the quantity of GST paid.g. The worker who has exercised an choice to pay tax beneath concessional tax regime beneath part 115BAC of Earnings tax Act, 1961 shall not be entailed for the above exemption.h. A person needn’t take depart for this function nor undertake any journey.i. The deemed LTC fare is capped at INR 36,000 per particular person (spherical journey). For non-Central Authorities staff, cost of money allowance of a most of Rs 36,000 per particular person as deemed concession fare can be allowed as revenue tax exemption topic to different phrases and situations.For Central Authorities staff, there are particular slabs for optimum LTC concessions (Worker eligible for enterprise class is Rs 36,000 per particular person per journey, staff eligible for economic system class is Rs 20,000 per particular person and staff eligible for rail fare is Rs 6,000 per particular person per journey).j. In case the worker spends lower than the required quantity, the tax exemption, and the LTC money allowance will stand decreased by the proportion of the shortfall in spending.okay. If an worker has acquired an quantity prematurely which has some extra quantity, then the worker would want to return this quantity to the employer.l. As per the OM dated 12 October, an quantity as much as 100% of depart encashment and 50% of the worth of deemed fare could also be paid as advance into the checking account of the worker which shall be settled primarily based on manufacturing of receipts in the direction of buy and availing of products and providers. The claims beneath this package deal (with or with out advance) are to be made and settled throughout the present monetary 12 months.4) IllustrationDeemed LTC Fare : Rs.20,000 x 4 = Rs. 80,000Quantity to be spent : Rs. 80,000 x 3 = Rs. 2,40,000Thus, if an worker spends Rs. 2,40,000 or above on specified expenditure, he shall be entitled for full deemed LTC fare and the associated income-tax exemption. Nevertheless, if the worker spends Rs. 1,80,000 solely, then he shall be entitled for 75% (i.e. Rs. 60,000) of deemed LTC fare and the associated income-tax exemption.The above measures are anticipated to stimulate demand and subsequently increase the economic system.(By Homi Mistry, Associate, Deloitte India, with Niji Arora, Senior Supervisor, and Tarika Agarwal, Supervisor with Deloitte Haskins and Sells LLP)Get dwell Inventory Costs from BSE, NSE, US Market and newest NAV, portfolio of Mutual Funds, calculate your tax by Earnings Tax Calculator, know market’s High Gainers, High Losers & Finest Fairness Funds. Like us on Fb and comply with us on Twitter.Monetary Specific is now on Telegram. Click on right here to hitch our channel and keep up to date with the newest Biz information and updates. By bhagat|2020-11-19T11:25:00+05:30November 19th, 2020|Categories: Latest News|Tags: applicability, deemed ltc scheme, government scheme, leave travel concession cash voucher scheme, ltc cash voucher scheme, tax incentive|0 CommentsShare This Story, Choose Your Platform!FacebookTwitterRedditWhatsappTumblrEmail Related Posts Sonu Sood’s job search app Pravasi Rojgar to type JV with Singapore’s Temasek; raises Rs 250 crore Gallery Preserve ‘purchase’ on NTPC because it ups its sport in RE house Gallery Shares in focus: HDFC Financial institution, Laurus Labs, Lakshmi Vilas Financial institution, Larsen & Toubro Gallery Analyst Nook: Adani Group focusing extra on B2C as towards B2B Gallery OTT trade to draft a software package to implement self-regulation code Gallery Leave A Comment Cancel replyYou must be logged in to post a comment.