LTC Cash Voucher Scheme 2024 – Features and Benefits

In this article, different aspects of the LTC Cash Voucher Scheme are discussed. Read this blog to know more about the scheme in detail.

Economically, India is Asia’s third-largest country. The Indian federal government has proposed a bonus for central government employees. Mrs. Nirmala Sitaraman, Finance Minister, described this scheme as the latest measure to promote demand. Employees will be paid for their travel expenses in cash, according to the portal’s plans. Mrs. Sitaraman estimated that the scheme will cost 7500 crores for central government employees and public sector units. In This  blog know more about LTC Cash Voucher Scheme 2024

Many private-sector personnel lost their jobs and experienced serious issues in their lives during the global pandemic. Small and medium-sized business organisations and owners face numerous challenges as a result of the liquidity shortage. The government tax revenue department has recently fallen there. Central government personnel, on the other hand, will use this system to acquire products or services. Instead of providing leave tax concessions or leave tax allowances, they will be able to conduct any work. In this unusual situation, the government implemented a new prakalpa known as the LTC Cash Voucher Scheme, under which the central government and PSUs will pay central government personnel from the total amount of LTC.

LTC Cash Voucher Scheme

The government will provide cash vouchers to employees of both the federal and state governments through the adoption of the LTC Cash Voucher Scheme for the year 2024. These vouchers will be given to employees so that they can cash them in and purchase various products as defined by the authorities that have initiated the scheme. Employees will be able to purchase things with a GST of around 12%. Employees are only permitted to purchase non-food items. Employees will only be able to use this cash coupon at GST-registered establishments if they make their purchases digitally.

Insurance Premium 

1. The LTC Cash Voucher system is available for health, life, and term insurance products. However, it is only valid to insurance purchased between October 12, 2020 and March 31, 2021. The premiums paid for health insurance, life insurance, or term insurance policies will be repaid to policyholders under the scheme, subject to the allowable limitations and applicable portions of the Income Tax Act of 1961.
2. So, if you purchase a life insurance plan such as a term plan, you can obtain a refund on premiums paid the full to ₹1,50,000 under Section 80C of the Act.
3. Similarly, if you purchase a health insurance policy, you can receive a refund of up to ₹75,000 in premiums paid under Section 80D of the Act.
4. If you haven’t purchased health or life insurance yet, the LTC plan incentive can be a wonderful motivator to do so. Furthermore, health insurance and life insurance coverage are necessary to protect your loved ones when disaster strikes or when you are unable to provide assistance. You might begin by purchasing a term insurance policy, which is the simplest, purest, and most cheapest type of life insurance. Aside from the tax advantages, you can purchase term insurance for a variety of term insurance perks. However, before purchasing a term insurance policy, you should analyse the benefits, price, and other characteristics. (A term insurance calculator can assist you with this decision.)

Key Highlights of LTC Cash Voucher Scheme

Objective of the LTC Cash Voucher Scheme

The main purpose of the government by creating the LTC Voucher Scheme is to give sufficient amenities to all of the Central Government employees but also this scheme would aid in the economical flow of the country. Employees will be reimbursed for travel expenses, but they must spend three times the amount authorised by the concerned authorities of the country’s finance minister. Employees who are issued 6000 LTC fare travel coupons must spend ₹18000 on non-food products under 12% GST. This will boost the country’s economic flow, and the people will help generate more cash in the economy.

Eligibility Criteria to Apply

When applying for the LTC Cash Voucher Scheme, applicants must meet the following eligibility requirements:

1. The applicant must be an Indian citizen.
2. A working Central Government employee must apply.
3. The applicant may also work for the state government.

Conditions to be fulfilled to avail LTC Cash Voucher Scheme

To qualify for the LTC income tax benefits, employees must:

1. Purchase products and services (such as household appliances, two-wheelers, four-wheelers, and prepaid services such as DTH recharge, broadband payments, mobile phone bills, and so on) from GST-registered sellers.
2. The purchase can only be performed using digital payment methods (cash payments are ineligible for deduction)
3. Purchase goods and services with a minimum goods and services tax rate of 12%.
4. Can only buy goods and services untill March 31, 2024. (as the LTC scheme benefit is only available for the year block 2018-2021)
5. Only one of the LTC benefit payments may be used in a single year.
6. Can can purchase health and life insurance plans (such as a simple term plan) and receive reimbursement for premiums paid up to the allowable limits.

Features and Benefits of LTC Cash Voucher Scheme

1. To stimulate customer demand in the industry, the LTC cash voucher Scheme was established.
2. This programme will increase the country’s economic flow.
3. In order to receive the advantages under this system, the employee must spend three times the travel expense voucher.
4. This amount must be spent on goods and services with a GST of 12% or more.
5. To take advantage of the LTC cash scheme, a GST invoice must be submitted.
6. Employees are expected to make digital purchases from GST-registered retailers.
7. Employees who purchase food-related items are not eligible for this scheme.
8. The government will give the required fare, which employees must use by March 31, 2024.
9. Both public and private sector employees are eligible for the scheme.
10. It will boost GST collection.
11. Through LTC cash scheme the government is seeking to create additional demand of ₹1 lakh crore in the economy

Deemed LTC Fare

The amount of LTC vouchers given to employees, as well as the value of these vouchers, are as follows:

Should You Choose for it?

1. This prakalpa is optional. Employees can choose regular LTC Cash Voucher Scheme for multiple years in a row.
2. They are qualified for the maximum amount of LTC.
3. Because an employee can travel with family members, they are eligible for LTC/LTA exemption.
4. They may be able to claim LTC under this new approach during the coronavirus outbreak.
5. It will be available by the end of March 2024.
6. Individuals who receive LTC/LTA from their respective jobs will benefit from tax breaks.
7. Under the LTC Cash Voucher Scheme plan, if employees express an interest in receiving benefits, they must spend three times the amount of LTA, which is equivalent to a leave encashment.

Conclusion

According to government officials, the Finance Minister launched this arrangement since the money was originally supposed to be utilised by government employees on their leaves that were missed due to the coronavirus outbreak. Now that travel restrictions are easing, the government’s concerned officials will provide LTC Cash Voucher Scheme  to all employees as a trip expense. Employees can use these cash vouchers to travel to any of their destinations, but they must be used before the expiration date of March 31, 2024. Employees might travel to their house or to any other location. These certificates can help them meet their trip expenditures.

We hope that this article will be useful to you whenever you require assistance with Indian post office savings. Additionally, you can contact Vakilsearch if you have any questions. Our legal professionals will do everything in their power to assist you in this procedure.

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