BackGovt announces LTC voucher scheme for employees: 5 things to know
The tax concession will be allowed for State Government/Private sector too, for employees who currently are entitled to LTC
PremiumFinance Minister Nirmala Sitharaman on Monday announced giving out cash vouchers to central government employees this year in lieu of leave travel concession (LTC) fare which could be spent only on buying non-food GST-rated items. FM Sitharaman said the employees could buy items that attract 12 per cent or more goods and services tax (GST). These purchases will have to be made in digital mode from GST-registered outlets.
To incentivise the govt sector employees
Every four years, central government employees get LTC to any destination to their choice plus one to their hometown.
Since travel is difficult to undertake during the pandemic, the government will pay the entitled fare as cash vouchers which have to be spent by March 31, 2021, she said. The LTC voucher scheme is to incentivise the govt sector employees' contribution for the revival of demand in the country.
Govt says that LTC voucher scheme will boost the generate demand worth ₹28,000 crore.
Central Govt employees get LTC in a block of 4 years (one to anywhere in India & one hometown or two for home town) Air or rail fare, as per pay scale/entitlement, is reimbursed and in addition, Leave encashment of 10 days (pay + DA) is paid.
Also read: Special festival advance scheme announced for government employees: 5 points
Financial Boost to the Economy
"If Central Government employees opt for it, cost will be around Rs. 5,675 crore. Employees of PSBs and PSUs will also be allowed this facility and the estimated cost for them will be Rs. 1,900 crore," FM said.
FM further added that the tax concession will be allowed for State Government/Private sector too, for employees who currently are entitled to LTC, subject to following the guidelines of the Central Government scheme.
Demand infusion in the economy by Central Government and Central PSE/PSB employees is estimated to be Rs. 19,000 crore approx. Demand infusion by State Government employees will be Rs. 9,000 crore.
Additional consumer demand generated will be Rs. 28,000 crore.
Read the highlights of the FM Sitharaman's presser
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