The central government has extended the deadline for the complete and final settlement of bills relating to the LTC special cash package program, providing relief to central government employees.
Many employees' CTC packages contain a leave travel concession (LTC). According to section 10(5) of the Income-tax Act, this part is tax-free up to the number of actual travel expenses.
Previously, the deadline for the LTC special cash package scheme was March 31, 2021, which was later extended to April 30, 2021, and now to May 31, 2021.
The Ministry of Finance Office Memorandum, which announced the LTC relief for central government employees, said, "Queries have been received by this department to extend the date of submission of bills/claims and settlement beyond 30th April 2021. Keeping in view of the situation existing due to Covid-19 pandemic, it has been decided that submission of bills claims may be entertained and settled by Ministries/Departments not later than 31st May 2021."
However, the department of expenditures' OM regarding the extension of the LTC special cash package scheme stated that payment for the transactions must be made by the due date, which is March 31, 2021.
In 2020, the center announced the LTC special cash package program, also known as the LTC Voucher Scheme, in order to hold Covid-19 in India, resulting in a nationwide lockdown.
Payment for the transactions should have been made no later than the due date, which is March 31, 2021, according to the Department of Expenditure's OM on the extension of the LTC special cash package scheme. Previously, the deadline for the LTC special cash package scheme was March 31, 2021, which was later extended to April 30, 2021, and now to May 31, 2021.
What is LTC Cash Voucher Scheme?
Government employees can use their LTC cash vouchers to buy products and services instead of paying taxes on the tax-free part of their LTC gain. Under the LTC system, they can buy any products or services with a GST rate of 12 percent or higher. To be eligible for reimbursement under this special cash voucher program, this must be completed between October 12, 2020, and March 31, 2021.
Payments for products or services purchased under the LTC scheme must be rendered digitally or by check, Demand Draft (DD), NEFT, or RTGS.
Premiums charged for life insurance plans between October 12, 2020, and March 31, 2020, are available for reimbursement, according to the LTC scheme's fine print. To be eligible for the LTC program, workers must send original bills or self-attested copies as requested by their department.