Saturday, 20 February 2021

Opportunity to claim LTC Concession



To overcome the low spending due to Covid and kickstart the economy, Finance Minister had announced several measures to boost the ailing economy.

Among them, the salaried class would be most happy with the LTC CASH VOUCHER SCHEME. Because this scheme is not restricted to the Central Govt Employees, but even the Private sector employees too are eligible to claim the leave travel allowance.


Employees can claim tax exemption on spending the LTC amount, by satisfying certain other conditions, without the need for actual travel.

The exemption is available to both government and non-government employees.

Instead of incurring expense on travel, the employee can now furnish proof for purchases made / services availed and avail the tax exemption.


The tax exemption will be restricted to the deemed LTC fare of up to maximum of Rs 36,000 per person for a round trip

The employee will be required to buy goods/avail services worth 3 times the deemed LTC concession fare and worth 1 time the value of leave encashment.

If the amount spent is short of the requirement, then the exemption would be allowed proportionately.


So, for example , if the deemed LTC Fare is Rs 80,000 (Rs 20,000 x 4),

then the amount to be spent under the scheme is Rs 2,40,000.


The scheme was introduced to make use of the unused LTC for the current block of 2018-21 that would otherwise lapse since employees could not fully utilize it due to disruptions caused by COVID-19.



What is LTC or Leave Travel Concession?

LTC or leave travel concession is an allowance available to the employees. This allowance is applicable for travelling to your declared hometown along with your eligible family members.



Some clarifications :

-The goods/services bought should be those attracting GST of 12% or more and should be bought from GST registered vendors/service providers.

-Only digital transactions are allowed and GST invoice is to be produced. -Expenditure should be incurred between 12 October 2020 to 31 March 2021 –

-Purchase of goods or services on EMI is also permissible under the scheme, provided they have been bought after 12 October and have a GST invoice.


-The government has also clarified that even services like interior decoration and phone bills are accepted provided GST is 12% or more.


Some more Clarifications :


I availed home LTC in 2019. What is my eligibility position for the LTC cash voucher scheme?

This scheme is for the LTC block of 2018-21. Normally, a block contains two LTC fare (home town and anywhere in India). If one has been availed and the other remaining, the same can be utilized for this purpose. Any unutilized LTC of the block of 2018-21 is eligible.


Whether any advance will be given like LTC advance?
Yes, an amount up to 100% of leave encashment and 50% of the value of deemed fare may be paid as advance into the bank account of the employee.


Whether a single bill of purchase of goods or services is to be submitted or multiple bills can be submitted?
Multiple Bills are accepted. The purchase should have been done from the date of issue of the OM ie 12.10.2020 till the end of the current Financial Year.



Life insurance and Health Insurance premium eligible for reimbursement under LTC cash voucher scheme

Lets see this with an example:
Mr A is an employee with 4 eligible family members. Let us assume he is entitled to leave a travel allowance of Rs. 156,000 from the employer-based on his compensation structure.

He can avail the LTC exemption only for the lower of Rs. 144,000 (Rs. 36,000 deemed fare per person for 4 members) and Rs. 156,000 (actual entitlement).

For claiming this exemption, he will have to invest in the specified expenditure 3 times the amount of 144,000, i.e, Rs. 4,32,000. The differential of Rs. 12,000 (156,000-144,000) would be taxable. If the employee spends less, then the entitlement/benefit shall also be reduced proportionately.


Continuing the above example: If he incurs expenditure of only Rs. 240,000, then the exemption will be restricted to Rs. 80,000 (i.e 2,40,000/4,32,000*144,000). The balance amount of Rs. 76,000 (Rs. 156,000-80,000) would be taxable.


Since the movement of individuals have been severely restricted in the lockdown situations, this is a welcome initiative by the government to boost consumer the demand which would then lead to increased spending and revive the

Indian economy.


 Note :
Payment of premium for new insurance policies purchased between 12 October 2020 and 31 March 2021, is eligible for the benefit under the scheme. This is not applicable to existing insurance policies.


Do consult your Tax Advisor / Tax Expert before taking any decision.



Srikanth Matrubai,

Wealth Architect,

Author : Don’t Retire Rich


Saturday, 2 May 2020


“I feel I was lucky because I wasn’t good at studies” - Pullela Gopichand  Never utters a single word on court but opened up his heart in an exclusive with DSP Mutual fund.
 Pullela Gopichand is versatile in making badminton a game that can be played and also that can coached to aspirants. As a recipient of Arjuna award and Dronacharya award which explains the confluence he created in the game,

Fantastic Learning from the Master...

Here are some takeaways:

Be the best of yourself for the day. That's the only thing you can control, that's the only thing you can celebrate

Focus on the process, the process becomes the goal

Live like a hermit and train like a shaolin monk

The story is always on your side not the other side

No matter how much you win always think of the glass as being half empty, that will keep you thirsty and push you to do more, once you are out of the court think of it like the glass half full, that will keep you satisfied

To remember what has to be remembered is the key to success

Let go of the regrets, be proud of the moment to enjoy it

On his leader
He made me comfortable
He made me like the environment
He only gave me shabashi
So I developed a liking for the craft

Success necessarily is not winning every time

Everyone is talented. We need to map the human with the talent. Its talent mapping over talent identification. Instead of just celebrating the champion we need to find what is he/she a champion in


Learning has to be continuous. It is important to realise that we don't know everything and we need to be humble to acknowledge that.

Today has to better than yesterday and tomorrow has to be better than today.

Challenge the senior and respect the junior By doing that ideas will automatically start flowing in

Be calm, alert & intuitive. The source of learning is within us. If you are calm you have clarity of thought

Be a student of the craft, be enthusiastic about learning and trying new ways, even if you fail spring back with enthusiasm to try again

Every time I go to the field I want to be better at coaching and every time I'm with the students I want to be better at the game. I learn from every student

Knowing what will fail is important

As a sportsperson, when you should be ready to ADMIT that you failed.
Winning and losing is secondary. Personal Excellence is what matters.
Ignore the Failure. Let go.

Don't celebrate wrongdoings Champions will always be there and you will find them but if you spoil the culture by celebrating wrong doings you won't get champions tomorrow

Final thought...
People in power need to be fair
People who have money need to give
People with education should have clarity

Thank you very much DSP for bringing the master to us.. Truly, Invaluable learning

Srikanth Matrubai

Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH
Do read the book and give your valuable feedback and request you to post positive comments on the Amazon. You can purchase the book on amazon and flipkart Please subscribe to my TELEGRAM channel

Opportunity to claim LTC Concession

Greetings,   To overcome the low spending due to Covid and kickstart the economy, Finance Minister had announced several measures to boo...