Government allows Income Tax exemption for payment of deemed LTC fare for non-Central Govt employees

A number of employees have not been able to avail Leave Travel Concession (LTC) in the current Block of 2018-21 due to ongoing pandemic. With a view to compensate Central Government employees and incentivise consumption, government allowed payment of cash allowance equivalent to LTC fare to Central Government employees subject to fulfillment of
certain conditions. Since the cash allowance of LTC fare is in lieu of deemed actual travel, the same shall be eligible for income-tax exemption on the lines of existing income-tax exemption available for LTC fare. In order to provide the benefits to non-Central Government employees, it has been decided to provide similar income-tax exemption for the payment of cash equivalent of LTC fare. Accordingly, the payment of cash allowance, subject to maximum of Rs. 36 thousand per person as Deemed LTC fare per person, shall be allowed income-tax exemption.