F.No. 12(2)/2020-EII(A)
Ministry of Finance
Department of Expenditure
EII(A) Branch

North Block, New Delhi 12th October, 2020

Office Memorandum

Sub: Special cash package equivalent in lieu of Leave Travel Concession Fare for Central Government Employees during the Block 2018-21.

In view of Covid-19 pandemic and resultant nationwide lockdown as well as disruption of transport and hospitality sector, as also the need for observing social distancing, a number of Central Government employees are not in a position to avail themselves of LTC for travel to any place in India or their Hometowns in the current Block of 2018-21.

2. With a view to compensate and incentivise consumption by Central Government employees thereby giving a boost to consumption expenditure, it has been decided that cash equivalent of LTC, comprising Leave Encashment and LTC fare of the entitled LTC may be paid by way of reimbursement, if an employee opts for this in lieu of one LTC in the Block of 2018-21 subject to the following conditions:-

a) The employee spends the money of a larger sum than the entitlement on account of LTC on actual expenditure.

b) Cash equivalent of full leave encashment will be allowed, provided the employee spends an equal sum. This will be counted towards the number of leave encashment on LTC available to an employee.

c) The deemed LTC fare for this purpose is given below :-

Category of employees Deemed LTC fare per person (Round Trip)
Employees who are entitled to business class of airfare Rs. 36,000
Employees who are entitled to economy class of airfare Rs. 20,000
Employees who are entitled to Rail
fare of any class
Rs. 6,000

d) The cash equivalent may be allowed if the employee spends a sum 3 times of the value of the fare given above.

e) The amount both on account of leave encashment and fare shall be admissible if the employee spends (i) an amount equal to the value of leave encashment and; (ii) an amount 3 times of the cash equivalent of deemed fare, as given above on purchase of such items / availing of such services which carry a GST rate of not less than 12% from GST registered vendors / service providers through digital mode and obtains a voucher indicating the GST number and the amount of GST paid.

f) The admissible payment shall be restricted to the full value of the package [leave encashment as admissible for LTC and deemed fare] or depending upon the spending as per example given at Annexure-A.

g) While TDS is applicable in the case of leave encashment, since the cash reimbursement of LTC fare is in lieu of deemed actual travel, the same shall be allowed exemption on the lines of existing income-tax exemption available to LTC fare. The legislative amendment to the provisions of the Income-Tax Act, 1961 for this purpose shall be proposed in the due course. Hence, TDS shall not be required to be deducted on the reimbursement of deemed LTC fare.

3. Head of the Departments / DDOs may make reimbursement under this package as per the details given above on receipt of invoices of purchases made / services availed during the period post the issuance of this order from the employees who are desirous to avail this package. It may be noted that in order to avail this package an employee should opt for both leave encashment and LTC fare.

4. An amount upto 100% of leave encashment and 50% of the value of deemed fare may be paid as advance into the bank account of the employee which shall be settled based on production of receipts towards purchase and availing of goods and services as given in Para 2(e). The claims under this package (with or without advance) are to be made and settled within the current financial year. Non-utilization / under-utilization of advance is to be accounted for by the DDOs in accordance with the extant provisions relating to LTC advance i.e. immediate recovery of full advance in the case of non-utilisation and recovery of unutilized portion of the advance with penal interest.

5. These orders will take effect from the date of issuance of this Office Memorandum and will be in force during the current financial year till 31St March, 2021.

6. All the Ministries/Departments are requested to bring the contents of this OM to the notice of all its Attached and Subordinate offices for their information.’

Hindi version of this Office Memorandum will follow.

(B.K. Manthan)
Deputy Secretary to the Govt. of India

To

  • All the Ministries/ Departments of the Government of India.

AnnexureDownload Notification in PDF Format

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16 Comments

  1. Bhavya says:

    Please clarify
    1. whether I can buy Gold which has gst above 12% with this LTC scheme???
    2. whether I can use bill of any item purchased in 2020-21, but before the issue of this order???

  2. RASOOL SHAIK says:

    Plz clarify I am working as a Central Government Employee in kvs MHRD(Autonomous organization) .In the block 2018-21 I want to utilise LTC package.My house construction is going on.Can I purchase steel and cement etc Gst items for producing the bill,because they are for my own use plz clarify.

  3. Sam says:

    This is the wrong time to spend unnecessarily on gimmicks. Saving is a better option in view of uncertain future. The onus of lifting the economy lies with with the government, not with the govt. employees who have been robbed of their DA increase.

  4. Rajendra Khare says:

    It is clarification which I seek not a comment.
    It is written in article that ” It may be noted that in order to avail this package an employee should opt for both leave encashment and LTC fare”. I would like to know if an employee has already availed 10 days leave encashment six times and he or she can not encash leave any more. In this case weather he or she will be allowed to take only LTC fare or not.

  5. Deepak Sathe says:

    This could have been made effective wef 1.4.2020 as some officials have retired upto 12.10.2020 but could not avail ltc benefit

    May fin ministry consider

  6. Raghavan says:

    Instead of freeing the block DA this FM is making it more monkey business the whole thing benefits the business class what about the central Govt Pensioners they are having hand to mouth struggling by withholding DA this Modi Govt doesn’t care for pensioners they are a forgotten lot why can’t this scheme apply to pensioner also they have toiled for more than 33 yrs that also in manual work system is this Modi Govt listening.

  7. Jose V L says:

    Is not the present order to use LTC facilities for marketing, presumably to help the commercial giants, against the provisions of the well written LTC Rules? Can a Finance Secretary override the well established rules for the sake of commercial firms? Disciplinary action could be taken against the officer who misused the LTC claim.

  8. Ssss says:

    Its makes utter flop. Main causes leave encasement and 3 times more value purchase. When people facing less salary due to DA freeze expecting 3 times more spend in lakhs is not well designed.

    1. HARISH DUDEJA says:

      Dear Sir,
      My basic Salary is Rs.96600/- in Delhi Govt. I am entitiled for economy class LTC for myself and spouse only. I am also going to retire this month only. Kindly advise as to how much I have to spend and how much I can get against this benefit. There are only 8 E.L. in my account for leave encashment purpose. Kindly expedite your reply as my super annuation is coming soon.
      I shall be highly thankful to you.

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