Government has recently made an announcement on 29th October, 2020 in continuation to an earlier announcement made vide Office memorandum F.No. 12(2) /2020-EII (A) dated 12th October, 2020, that all non-central government employees will be eligible for income tax exemption for the entire leave travel concession amount maximum up to Rs 36,000 per person as deemed LTC fare per person (round trip) without producing his travel bills. However, such employees will have to spend three times the amount for purchasing goods or services on which GST of 12% or higher is levied.

Employees will have to make the purchases through digital payment mode only and submit the invoices to avail the benefit.

However, few points need to be adhere while claiming the benefit under this scheme-

1. Only those employees will be eligible for this scheme those haven’t already availed the tax benefit exemption during the block of Jan 2018- Dec 21.

2. Employee who spends less than 3 times the fare amount will get proportionate income tax exemption.

3. Purchases have to be made within the period of 12th October, 2020 to 31st March, 2021.

4. This scheme benefit is not available to an employee who has exercised an option to pay income tax under new income tax / concessional tax regime.

Leave Travel Concession

 Example is hereby given below to understand its eligibility, suppose if the LTC fare is Rs 20,000, and is claimed for a family of four, then the employee would get Rs 80,000 (20,000 x 4). The amount that the employee will have to spend would be Rs 2,40,000 (Rs 80,000 x 3). However, if the employee ends up spending only Rs 1,80,000, the person would get tax exemption of Rs 60,000 only (75% of 80,000).

Also Read-

COVID 19 Ex Gratia to borrowers for difference in interest : FAQs

Income-tax Exemption on deemed LTC fare for non-Central Government employees

FAQs on LTC Cash Voucher Scheme

Misinterpretation of LTC stimulus and its benefits

Special Cash Package Scheme In Lieu of LTC for Government Employees


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Company: Jindal Ila & Co | Chartered Accountants
Location: Gurgaon, Haryana, IN
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  1. Hemant says:

    it is direct tax benefit or it will reduce the taxable income to eligible amount ? Let say family of 3 person incurred 3,24,000 to get max benefit 1,08,000 then 1,08,000 is tax benefit or 1,08,000 will deducted from taxable income and then tax calculate based on slab?

    if above is yes then is it correct if you speed 3,24,000 you will get tax benefit of 32,400 Max(30% of 1,08,000)
    please clarify ?

  2. Abhi says:

    Hi Sir,
    LTA was planned at the start o the year. Deemed LTC claim submission date in company is lapsed. How can I claim the Deemed LTC while ITR filling?

  3. K Handa says:

    Hi i have availed lta for december 2020 travel and now i have bought goods in feb for ltc claim and i wish to switch claim from lta to ltc and employer has not allowed my lta based on documents of travel by car but not letting me switch to ltc instead says show in itr but we cannot help .pls help with a resolution.

  4. Ujwal says:

    For GST bills with payment in digital mode , will UPI payments like PhonePe , GooglePay or UPI transfer from the bank account considered ?

  5. Ujwal says:

    Can receipt be in the name of any dependent?
    The invoices of the goods and services purchased as per the scheme may be in the name of a spouse or any family member who is eligible for LTC Fare as declared in the Service records.
    “” In the above FAQ answered , family member means will The dependent Parents & Siblings considered for the invoice to be on their name “”

  6. Suraj says:

    I have not opted for LTA in my flexi option for this year. Employer is allowing to claim only if I have opted LTA with in available flexi options. So, will i be eligible to exemption while i file ITR during July 2021

  7. chandan says:

    In block 2014-17 I claimed only once. My question is the carryover based on travel dates or on claim dates
    Here are my journey details:
    1)16 jan 17 – 27 jan 17 (claimed in FY2017-18) -> Is this considered in block (2014-17)
    2)31oct 18 13 nov 18 (claimed in FY2018-19) -> Can this be considered a carryover of block 2014-17?)
    3)11 march 2019 -17 mar 2019 (claimed in FY2019-20) -> Will this be a first of block 2018-21

    4) Can I still claim LTA for travel dates 22 dec – 21 jan ? ( to be claimed in FY2020-21 and considering as second travel of block 2018-21)

  8. Vidhya G says:

    I have claimed LTA for FY 2017-18 (The exact travel dates are 30th March 2018 – 1 April 2018). Am i eligible to claim LTA for this FY20-21. I have purchased a car on November 2020.

  9. Manabendra says:

    I had claimed my LTA in the month of May-2020 under taxable option. Can I now submit bills of purchase as per requirement and claim benefit for the AY2021-22?

  10. Sundar says:

    I am working in private IT company . I bought a car in the Dec month only which attracts the GST 28%. can i claim this amount under the LTA in either part of TDS or at the time of income tax filing ?

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