Unlocking the LTC Cash Voucher Scheme: Your Comprehensive Guide

Understanding LTC: LTC or Leave Travel Concession is a tax benefit allowing employees to claim domestic travel expenses under section 10(15) of the Income Tax Act. Objective of LTC Cash Voucher Scheme: Introduced to boost consumer demand during the pandemic, it enables employees to convert LTC benefits into cash for alternative expenditures.

Eligibility: Initially for central government and PSU employees, it now includes those in the private sector, PSUs, and state government, broadening access to tax-saving opportunities. How it Works: Eligible employees must adhere to criteria like utilizing LTC benefits for the 2018-2021 block and spending on goods/services subject to GST of 12% or more.

Conditions for Claiming Benefits: Spending an amount equal to leave encashment plus three times the deemed LTC fare between October 12, 2020, and March 31, 2021, is necessary. Deemed LTC Fare: The cash equivalent of LTC fare varies based on travel entitlement, with employees eligible for up to ₹36,000 per person for business class airfare.

Tax Benefits and Considerations: While opting for the LTC cash voucher scheme offers tax savings, careful consideration and consultation with employers or tax advisors are advisable.