Income Tax Exemption of Rs. 36,000 per family member to a Salaried person for the Financial year 2020-2021 (also available to Private Sector Employees)
Many Salaried employees get Leave Travel Concession (LTC) from their Employers which is exempt to the extent it is actually spent on travelling. LTC which could not be spent is taxable in the hands of employee. However, in view of the COVID-19 pandemic and resultant nationwide lockdown, many employees were not able to travel and were thus not able to avail the benefit of LTC for the FY 2020-2021.
Thus, the Government has provided for Income tax exemption on account of value in lieu of Leave Travel Concession.
To claim the above exemption – The Employee should intimate the Employer about the details of specified expenditures (i.e. on which GST Rate is 12% or more) alongwith supporting vouchers. The employer will accordingly deduct lower TDS after considering this exemption. If the employee is unable to intimate the employer, he/she can claim the exemption while filing their income tax return for the Financial year 2020-21 (Assessment year 2021-22)
Note: If an employee opts for new tax regime u/s. 115BAC of the Income Tax Act, then such employee would not be eligible to claim the above exemption of LTC Cash Scheme.
Example: You can also claim deduction if you have purchased TV/Computer/AC/Car/Mobile, etc. between 12th October, 2020 to 31st March, 2021 subject to fulfilment of above conditions.
I hope you find this useful.