Exemption for LTC Cash Scheme Cash Voucher Against LTA

Exemption for LTC Cash Scheme Cash Voucher Against LTA

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Exemption for LTC Cash Scheme Cash Voucher Against Leave Travel Allowance Under the existing provisions of the Act, clause (5) of section 10 of the Ac

Exemption for LTC Cash Scheme Cash Voucher Against Leave Travel Allowance

Under the existing provisions of the Act, clause (5) of section 10 of the Act provides for exemption in respect of the value of travel concession or assistance received by or due to an employee from his employer or former employer for himself and his family, in connection with his proceeding on leave to any place in India. Given the situation arising out of the outbreak of the COVID pandemic, it is proposed to provide tax exemption to cash allowance instead of LTC.

Hence, it is proposed to insert a second proviso in clause 5 of section 10, to provide that, for the assessment year beginning on the 1st day of April 2021, the value instead of any travel concession or assistance received by, or due to, an individual shall also be exempt under this clause subject to fulfilment of conditions to be prescribed. It is also proposed to clarify by way of an Explanation that where individual claims and is allowed exemption under the second proviso in connection with prescribed expenditure, no exemption shall be allowed under this clause in respect of the same prescribed expenditure to any other individual.

The conditions for this purpose shall be prescribed in the Income-tax Rules in due course and shall, inter alia, be as under:
(a) The employee exercises an option for the deemed LTC fare instead of the applicable LTC in the Block year 2018-21;
(b) "specified expenditure" means expenditure incurred by an individual or a member of his family during the specified period on goods or services which are liable to tax at an aggregate rate of twelve per cent or above under various GST laws and goods purchased or services procured from GST registered vendors/service providers;
(c) "specified period" means the period commencing from the 12th day of October 2020 and ending on the 31st day of March 2021;
(d) the amount of exemption shall not exceed thirty-six thousand rupees per person or one-third of the specified expenditure, whichever is less;
(e) the payment to GST registered vendor/service provider is made by an account payee cheque drawn on a bank or account payee bank draft, or use of an electronic clearing system through a bank account or through such other electronic mode as prescribed under Rule 6ABBA and a tax invoice is obtained from such vendor/service provider;
(f) If the amount received by, or due to an individual as per the terms of his employment, from his employer about himself and his family, for the LTC is more than what is allowable to such person under the above-discussed provisions, the exemption under the proposed amendment would be available only to the extent of exemption admissible under above-listed provisions.

This amendment will take effect from 1 st April 2021 and will, apply to the assessment year 2021-2022 only.
Exemption for LTC Cash Scheme Cash Voucher Against LTA, Exemption for LTC Cash Scheme Cash Voucher Against Leave Travel Allowance, Exemption for LTC Cash Scheme Cash Voucher Against Leave Travel Allowance (LTA)

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Saral Tax India | सरल टैक्स इंडिया: Exemption for LTC Cash Scheme Cash Voucher Against LTA
Exemption for LTC Cash Scheme Cash Voucher Against LTA
Exemption for LTC Cash Scheme Cash Voucher Against Leave Travel Allowance Under the existing provisions of the Act, clause (5) of section 10 of the Ac
Saral Tax India | सरल टैक्स इंडिया
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