Changes in Leave Travel Allowance/Concession
Due to COVID 19 pandemic, most of the employees are not able to avail of the exemption under Leave Travel Concession / Leave Travel Allowance (LTC/LTA) for the block 2018 – 2021. In order to boost the economic compensation and to compensate the Government Employees, the Government of India allowed payment of cash allowance equivalent to LTC fare to central Government Employees subject to fulfillment of certain conditions vide No F. No 12(1)/2020-EII (A ) dated 12th October 2020.
In order to provide the same benefits to other employees (i.e Other than non-government employees), the Government of India has decided to provide a similar income tax exemption equivalent to LTC/LTA fare.
Terms & Conditions:
- LTC/LTA should be a component of CTC or Gross Salary.
- The employee should have an option to claim LTC/LTA exemption in the current block (i.e 2018 -21).
- Employees spend a sum equal to 3 times the value of the deemed LTC/LTA fare on the purchase of goods and services which carry GST rate not less than 12% through digital mode during the period from 12th October 2020 to 31st March 2021.
- The employee spends less than the 3 times the deemed LTC/LTA fare during the specified period shall not be entitled to receive the full amount and income tax exemption shall be reduced proportionately.
- If LTA received is more than Rs.1,44,000 per annum, Tax exemption will be limited to LTA of Rs.1,44,000 only.
- If LTA received is less than Rs.1,44,000 per annum, Tax exemption will be limited to the actual value only.
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