Union Finance Minister Nirmala Sitharaman announced Travel (LTC) cash voucher and special festival advance schemes for government employees in an attempt to stimulate demand and boost consumer spending ahead of the upcoming festive season.
“Indications are that savings of government and organized sector employees have increased. So, we want to incentivize such people to boost demand for the benefit of the less fortunate,” Finance Minister said.
“LTC cash can be used to buy goods, services worth 3 times fare, 1 time leave encashment before March 31, 2021. Fare payment will be tax-free and leave encashment will be taxed at the usual rate,” she added.
Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment and 3 times ticket fare to purchase items that attract GST of at least 12 per cent.
If the central government employees opt for these benefits, this will cost around Rs 5,675 crore. The employees of PSBs & PSUs are also allowed to avail this facility, and for them, the cost will be Rs 1,900 crores.
Every four years, central government employees get LTC to any destination to their choice plus one to their hometown.