LTA CASH VOUCHER SCHEME: BENEFIT ALLOWED TO SALARIED IN AY 2021-22 IT RETURN, INDIA-WRITING FOR THE BENEFIT OF READERS

 LTA CASH VOUCHER SCHEME: BENEFIT ALLOWED TO SALARIED IN AY 2021-22 IT RETURN, INDIA: WRITING FOR THE BENEFIT OF READERS

 

On public demand, explaining this subject for the benefit of the readers.

Yes, in the new Portal of ITR (Income Tax Return) e-filing for AY (Assessment Year) 2021-22 it ( LTA Cash Voucher Scheme for the Salaried ) has been allowed except for the Central Government Employees of India.

Under normal circumstances, under LTA ( Leave Travel Assistance) Scheme, the salaried employees are allowed to claim income tax exemption for Tickets of Travel (leisure travel) within India for 4-family members including himself/herself once in 2-years but twice in a block of 4-years u/s 10(5) of IT Act.

Since under Covid-19 pandemic, travelling was almost impossible, the Govt of India allowed LTA Cash Voucher Scheme to,  some way compensate the Salaried persons for this purpose in Income Tax Return for Assessment Year (AY) 2021-22 ( relating to Financial Year 2020-21 ).

Under the LTA Cash Voucher Scheme, it has been allowed that the Salaried Individuals will be given exemption up to Rs. 36000/- per person (per family member up to 4-family members) if 3-times of this amount, i.e. Rs. 1,08,000/- (36000x3) would have been spent by the Salaried Individual (per person/family member) on any Goods/Services attracting 12% GST minimum and there should be a GST invoice showing 12% GST charged actually.


This implies that a salaried person can avail income exemption up to Rs 1,44,000/-maximum (36000x4) from his/her income provided; he/she would have spent up to Rs 4,32,000/- minimum ( 1,44,000x3 ) on any Goods/Services attracting 12% GST minimum and having GST invoice (s), during the financial year concerned ( say for AY-2021-22, Fin Yr 2020-2021 ), provided the purchase(s) would have been made in between 12th October 2020 and 31st March 2021, primarily as it was notified by Govt of India circular on 29th October, 2020 and the payment for the same purchase should have been made by digital mode of payment.

Availing of this benefit in the AY 2021-22, will be considered as one Normal LTA exemption that is allowed twice in a Block of 4-years under the IT Act.

Please note this scheme is applicable to Non-Central-Govt Employees. The Central Government Employees are not allowed to avail of this scheme.

The Link for the Govt of India circular for this LTA Cash Voucher Scheme dated 29-Oct-2020 is given below here in below:


https://www.incometaxindia.gov.in/Lists/Press%20Releases/Attachments/870/Press-Release-IT-Exemption-for-payment-of-deemed-LTC-dated-29-10-2020.pdf

Practically; take this catch; if you have made any (anything may be, whatever) expenditure with 12% GST minimum charged in it, in between the period 12-Oct-2020 to 31-Mar-2021, you can avail income exemption under the above limits allowed for the AY 2021-22 ITR purpose. It will be very beneficial for the persons (employees) who are being paid the LTA component within their Salary Structure itself, as they are in any case sacrificing the LTA, irrespective of Blok Period and number of LTA Travels. This is as per law and no harm if anyone avails this benefit as allowed.

 
An Example, for easy understanding, the individuals who might have bought a Car (Motor Vehicle) as per the above period, they should have an invoice for sure, without that nobody can buy a new Car, can avail this benefit for their family of 4-members (2-Spouses +2 Children). People can have many other examples. Another example, even all Hotel Stay Expenses (any purpose) during the period from 12-Oct-2020- to 31-March-2021 can be used to take this exemption for salaried employees. In fact, for all parties and functions such as Birthday Parties (including self, parents and children), Marriage Parties ( for Self or Children ), Wedding Anniversary Parties ( for Self, Children and parents ) all that you may have been billed with 12% GST Minimum, during the above-said period, can be accounted and taken income exemption under the above scheme. Any other examples are for you to find out. As the scheme says any expenditure on any Goods/Services, where 12% min of GST has been charged, it is boundary-less domain within specific period as above-said.
This blank-cheque scheme provided by the Govt of India to the Salaried individuals should be availed of by all Salaried Individuals (other than the Central Govt Employees) within its specifications.

About the Author : Dr. Nimain Charan  Biswal is a B.Sc.(Agri. Science and Technology), M.B.A. and Ph.D.(Management Area ) by qualifications and he has 36 years of work experience in both  industrial and development sectors in diversified fields of social importance. He has been educated at Orissa University of Agriculture and Technology (OUAT)-Bhubaneswar, Institute of Rural Management Anand (IRMA) and Gujarat University (with Resource Support of IIM-Ahmedabad). Dr. Biswal is further educated at IIM-Calcutta, XLRI-Jamshedpur, Apple Computer Industries and Spar Inc., USA. He has worked for reputed National and International Organizations in Senior/Top Management Capacities at Board level as well as Managing Director and CEO. He is a management expert covering extensive areas from management in agriculture, industrial management, development management to management of public systems. He is a prominent professional of India and known Internationally as well. He lives at Mumbai in India.

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