LTC cash voucher scheme and Festival Advance: All you need to know about it
Union Finance Minister, Nirmala Sitharaman today announced proposals regarding consumer spending and capital expenditure. Under consumer spending, she announced proposals within two components–LTC cash voucher scheme and special festival advance scheme.
Here’s all you need to know about the leave travel concession (LTC) cash voucher scheme:
(1.) Central government employees get leave travel concession in a block of four years–one each to a destination of choice and home town or two for home town.
(2.) Under this, the air or rail fare is reimbursed as per pay scale/entitlement. Also, a leave encashment of ten days (pay+dearness allowance) is paid.
(3.) However, employees will not be able to avail the LTC in the 2018-21 year block due to the ongoing Covid-19 pandemic.
(4.) In lieu of one LTC during 2018-21, employees will receive cash payment. There will be full payment on leave encashment and fare will be paid as per three slabs depending upon the class of entitlement. Further, there will be no tax on fare payment.
(5.) An employee opting for this scheme will have to buy goods and services worth three times the fare and one time leave encashment, and do so before March 31, 2021.
(6.) The money is to be spent on goods attracting GST of 12% or more and only digital payments will be allowed. Also, employees will have to provide GST invoice.
(7.) The finance minister said the scheme would cost Rs 5,675 crore if central government employees opt for it. However, for PSB and PSU employees, its cost would be Rs 1,900 crore.
(8.) Sitharaman further projected that with even 50% states opting for this scheme, the government expects to infuse Rs. 9,000 crore into the economy.
The 7th pay commission doesn’t have the Festival Advance scheme but the government is reviving now. This time Festival Advance is not limited to non-gazetted officers. The Festival Advance will be Rs 10,000 for all central government employees to be repaid in 10 instalments. It will be given as prepay Rupay card to be used up to March 31, 2021, and it will be an interest-free amount.