LTC Cash Voucher Scheme Benefits, Calculation, Process

LTC cash voucher scheme As everyone knows that the whole world is suffering from COVID-19 pandemic. At this time, every citizen whether they are employed or not are handling different types of issues. Coronavirus virus epidemic hit the economy of India so hard and now its time to boost up the performance and morale of workers, Finance Minister Nirmala Sitharaman announced the cash-in-lieu of LTC which is Leave Travel Concession.

If you are engrossed in this subject and desire to apprehend added knowledge regarding LTC cash voucher scheme then must examine the entire article. Here we have comprised all the informative topics by which candidates can easily understand the functioning and other aspects of LTC.

About LTC Cash Voucher Scheme

The COVID-19 epidemic has caused several problems for everyone, and claiming for Leave Travel Concession is one of the difficulties for working people. So many employees serving for central government are not able to avail LTC such as travelling inside the country during the current block i.e. 2018-2021. According to the prerequisites of income tax, LTC profit is needed by employees in a slab of four years this duration is called a block. At present, the block for LTC is 2018 to 2021 (i.e 1st January 2018 to 31st December 2020).

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Not only government sector employees, but also private & public sector can avail the advantages of LTC. And this is very great news for those employees who are working for a private organization. Deloitte partner Aarti Raote stated “India’s Finance Minister during her presentation explained the benefits of LTC that would be elongated to workers of government as well as private sector too. Nevertheless, after the release of official circular, it is found that the notice only belonged to govt employees. And for this, an explanation was required.” For this, authorities have also released a notification in which they have mentioned complete info about LTC for the non-central worker too.

Only the fare part will be free of tax and holiday will be subjected to encashment tax. You have to go for both leave encashment and LTC fare to be eligible for this tax relief package. The memorandum of the Ministry office of Finance states that encashment of up to 100% of leave & 50% of deemed rent can be given into the bank account of employee and subsequently fixed after statement will be equipped.

Motive of Introducing LTC Scheme

According to the concerned officials, it is stated that the scheme has introduced by the Finance Minister of India. Earlier government workers used the amount of money provided by govt. on their leaves, now which were left due to coronavirus. Now, as constraints on travelling are deteriorating day by day, officials will be giving cash vouchers to all worker whether they are central govt employee or non-central as their travel expenses. With the help this, employees can now visit anywhere. But these vouchers are valid till 31st of March 2021 only.

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Description of Deemed LTC Fare

As per the scheme called LTC cash-in-lieu, such employees can obtain their consent encashment (worth DA & basic 10 day’s) and receive reimbursement for travel expense they are eligible for according to their category. Check out the table given below for detailed information regarding LTC fare.

Description of Employees According to FarePrice of Vouchers
Employees who are authorised to Business Class of Airfare36000 INR
Employees who are authorised to an Economy Class of Airfare20000 INR
Employees who are authorised to Rail fare of Any Class6000 INR

Abstract of LTC Cash Voucher 2020 Scheme

Name of SchemeLTC (Leave Travel Concession) Cash Voucher Scheme 2020
Scheme Announced byFinance Minister of India, Nirmala Sitharaman
LTC Block2018-2021
Objective of this SchemeCash vouchers will to eligible employees for travelling & purchasing things according to LTC Fare
RecipientsCentral Government/ Non Central Govt Employees

Aspects of Leave Travel Concession Cash Voucher Scheme

  1. All those employees who want to avail LTC Cash Voucher Scheme must spend an amount on those things which have 12% GST or more
  2. If workers have spent money on food, then they will not be eligible to take advantage of this scheme.
  3. Candidate must have Bill or Invoice of GST of the purchased item in which the amount of item GST is mentioned.
  4. With the help of this scheme demand of consumer in market will definitely improve.
  5. It is necessary that the candidate who wants claim for LTC voucher must have paid amount of purchased things via digital mode only.
  6. This scheme will help to build and grow the country economic flow.
  7. It will also raise the GST number.
  8. Workers have to spend 3 times the expense of travel if they desire to avail the benefit of this scheme.
  9. Employees belong to non-central or private/public can also take the advantages of LTC voucher scheme.
  10. Candidate must keep in mind that these LTC vouchers are valid till 31st of March 2021, so use it accordingly.
  11. By introducing LTC cash voucher plan, govt wants to produce an added demand of 1 lakh crore rupees in economy.

Eligibility Standard for Availing LTC Scheme

All those applicants who are willing to avail the benefits of this scheme have to satisfy the eligibility criteria defined by higher authorities. In this segment, we have discussed the standard that all needy aspirants must fulfil.

  1. Applicants must be a Central Government or Non-Central Govt employee.
  2. Only the citizen of India can exercise the benefits of this scheme.
  3. All those applicants who are state government employee are also eligible for this scheme
LTC-Cash-Voucher-Scheme-info

Terms for Leave Travel Concession Cash Voucher Scheme

Employees working under central or non- central government will be compensated an amount which is equal to leave encashment and LTC fare by following these terms.

  1. Amount spend by workers must be equal to leave encashment part and three times of LTC deemed fare for acquiring anything or services.
  2. The items purchased by an employee must have at least 12% of GST rate.
  3. Employees must remember one thing that, items must be bought by online/ digital mode online from GST registered service providers or merchants.
  4. For claiming LTC vouchers, workers must have bill/ voucher, which includes GST number of merchant and GST price paid by employees.

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How Amount of LTC will be Calculated?

All those employees who are willing to know how LTC cash will be calculated then must read this essential section of this article. As per the HostBooks Limited, calculation of cash benefit will be done by implementing the steps given below. 

  • Step 1st- Available Encashment Leave is 10 (Maxi.)
  • Step 2nd- Leave Encashment Maximum Quantity is Pay Quantity * 10/30
  • Step 3rd- Fare Value Maximum Amount is equal to Deemed fare as provided earlier * Number of those family members who are eligible.
  • Step 4th- Total Maximum Quantity is Amount of Step 1st + Amount of Step 2nd.
  • Step 5th- Full cash amount to be spent for profit = Step 1st Result + (Step 2nd result *3)
  • Step 6th- Leave Encashment Total Percentage Share is equal to Step 2nd Amount * (100/ Step 5th Amount)
  • Step 7th- Total Fare Percentage Share is Result of Step 3rd* (100/ Result of 5h Step)

Important Note:

1. In case applicant (employee) consumes the amount of pay which is equal to Step 5th amount, then the cash allotted to him/her will be equal to the amount of Step 4th.

2. But, if candidate consumes amount which is less than value of Step 5th then, the amount which may be given to him/ her is as follows-

  • Leave Encashment is equal to the Exact value spends * percentage displayed after calculating Step 6th. 
  • Amount of Fare is Exact Value Consumes * percentage coming as a result after calculating Step 7th. 

Explanation with the Help of an Example

In this part of article, we have given a complete explanation by solving an example of the steps mentioned above. 

Expected Salary of Worker: 1,25,500 per month
Expected Total Number of Member Employee Family: 4
Economy Class Air Travel (20,000) is Eligibility Fare
Calculation LTC cash benefit is solved below.

  1. Maxi. Encashment Leave is (1,25,500 * 10) / 30 which is Rupees 41,833
  2. Maxi. Fare Amount (According to the eligibility standard of air travel fare of economic class discussed) = 20,000 multiplied by 4 i.e Rupees 80,000
  3. Total Amount of Full Cash Perquisite = 1,21833
  4. As per the notice of Finance Ministry, cash amount to be spent for profit = 41,833 Rupees + 240000 (INR 80,000*3) = 2,81,833 Rupees

Note: If a worker spent an amount which is fewer than 2,81,833 Rupees then cash benefit may hall be allowed given as specified below.

Let the amount spent by employee is Rupees 2,00,000, then

  •  Percent Share of Total Amount of Leave Encashment = 41,833 / 2,81,833 * 100 which is 14.84%
  • Percent Share of Total Value Fare i= 80,000 / 2,81,833 * 100 which is 28.38%

The percentage which comes out as a result applying it on the original spent amount is as follows.

  1.  Employee may be allowed leave encashment of 14.84% on account that is 2,00,000 * 14.84% = Rupees 29,680
  2. Employee may be allowed leave encashment of 28.38% on accountthat is 2,00,000 * 28.38% = 56,760 Rupees

Finally, Total Payable Value shall be Rupees 29,680 + Rupees 56,760 = 86,440 INR

Benefits of LTC Cash Voucher Scheme

  1. The very first advantage of this scheme that central and non-central employees will get the opportunity to avail this plan and which provides several facilities to them.
  2. The economic flow of our country will be on track again.
  3. All workers who skipped their leaves due to lockdown will get it in the form of LTC vouchers.
  4. Through these vouchers, employees can travel, buy things except food items but only those things which have more than 12% of GST.
  5. Aspirants who want to avail this plan must use these vouchers before 31st of March 2021.

Procedure to Apply for LTC Voucher Plan

There is no such particular procedure declared by higher authorities to apply for LTC scheme. Central or non-central employees, who want to avail the plan are required to submit application form and present a bill of the purchased item. Aspirants, please remember one thing that, those goods and service which you have bought must indicate 12% GST or more.

Important Links

Official Notice Released on 12th October 2020Click Here
Link for Official Portal of Dept. of ExpenditureClick Here

FAQ’s

In case, any worker has exhausted his/ her leave encashment limit for LTC plan then he/ she will be eligible to take advantage of this plan?

Employee can take advantage of this scheme without leave encashment. The expense must be as per the directed ratio for LTC patron.

What is the prescribed format to avail the benefits of LTC Cash Voucher Scheme

There is no recommended format to apply for this scheme. Keen aspirants can simply give an application in order to avail this plan.

What is leave encashment amount?

Leave encashment amount refers to that price which will be given by officials in exchange for their leave that is not availed by them.

What type of things will be qualified under LTC scheme reimbursement?

All the services & things (except food items) with 12% of GST or above will come under this plan. To avail LTC vouchers, candidates have to present bills or invoice of that item and payment mode should be only digital.

Can I apply for this plan, if I have purchased things through e-commerce website, ?

Yes, you can avail LTC scheme after buying items from e-commerce portal but candidates must have an invoice of that purchased item.

Is it important to provide single bill/ invoice or we can present multiple bills as per the purchase of item?

Officials will also accept multiple bills or invoice. But the purchase of items must be done after the announcement of memorandum and till the final date of this financial year.

If the employee uses his family member credit or debit card for digital payment, this scheme can be availed?

It is mandatory for all workers who want to take benefit of this scheme that they have to use that credit or debit card in which his/ her name is mentioned.

What is the price of Rail fare of Any Class LTC Cash Voucher Scheme?

6000 Rupees is the amount f Rail Fare of any class.

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