Follow Us :

1. The Government vide office memorandum no. F.No. 12(2)/2020—EH(A) dated 12 October 2020 announced the Cash Voucher LTC (Leave Travel Scheme) scheme for Government employees.

2. What is LTC Scheme? The Leave Travel Scheme is assistance received by the employee from his employer for traveling on leave. The employee and family can visit anywhere in India once in a block of 04 years. The current block period is 2018-21.

3. An employee can avail leave encashment for a maximum of 10 days during the period he avails LTC The leave encasements are payable on Basic pay + Dearness Allowance as on commencement of LTC.

4. In view of the Covid-19 pandemic and resultant nationwide lockdown as well as disruption of the 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.

5. With a view to compensate  and incentivise consumption by Central Government employees thereby giving a boost to consumption expenditure, it has been decided by the Government that the cash equivalent of LTC, comprising  Leave  Encashment and LTC fare of the entitled LTC may be paid by way of reimbursement.

6. Conditions for reimbursement: The cash equivalent of entitled LTC Fare and leave encashment will be given to the employee subject to the following conditions:

6.1 The employee spends an amount equal to the value of leave encashment and an amount 3 times of the cash equivalent of deemed fare, on purchase of items or avail services.

6.2 The item purchase or services availed shall carry a GST Rates not less than 12%.

6.3 Such purchase shall be from GST registered vendors/service providers through digital mode

6.4 The employee shall obtain a voucher indicating the GST number and the amount of GST   paid.

7. Deemed LTC fare: – The deemed LTC fare for this purpose is as follows:-

Sl Category of employees Deemed LTC fare (per person Round Trip)
(i) Employees who are entitled to business class of airfare Rs. 36,000
(ii) Employees who are entitled to economy class of airfare Rs. 20,000
(iii) Employees  who  are entitled to Rail of any class Rs 6000

8. Illustration :

The Basic Pay of an employee is Rs 1,38, 500 per month, and has a Family of 4 eligib1e for economy c1ass Air travel. The present DA rate for central Government employees is 17% of Basic Pay.

(a) Calculation of Leave Encashment:-

( Basic + DA)* No. of days leave enchased/30 (138500+23545)*10/30

Rs. 54015
(b) Fare Value  (assuming entitled for economic class)  20000*4 Rs  80000
(c ) The employee needs to spend 3 times of notional fare (80000*3) Rs. 240000
(d) Total amount  to  be  spent for full cash benefit ( a+c) Rs. 2,94,015

9. 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.

9.1 In case the employee spends fare amount only, Rs. 2, 40,000 in the above example, the total amount payable will be calculated as follows:

(a) Calculation of  % of leave encashment to the total amount to be spent (54015/294015) * 100 18%
(b) Calculation of % of fare amount to the total amount to be spent (80000/294015)*100 27%
(c ) Proportionate amount payable : 3 times of notional fare * % of leave encashment  2,40,000* 18% Rs. 43,200
(d) Proportionate amount payable : 3 times of notional fare * % of fare amount 2,40,000*27% Rs. 64800
(e)  Total amount payable ( c+d) Rs. 1,08,000

10. Other Salient Features of the Scheme:-

10.1 Optional Scheme:- It is not mandatory for an employee to opt for the scheme. If opted, the reimbursement will be given as per the calculation above. However, in order to avail of this package, an employee should opt for both leave encashment and LTC fare.

10.2 Tax Exemption  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 LTD fare.

10.3 Advance Payment 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 which shall be settled based on the production of receipts towards purchase and availing of goods and services as prescribed

10.4 Settlement of Claim  The claims under this package (with or without advance) are to be made and settled within the current financial year.

10.5 Recovery on non-utilization: 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-utilization and recovery of an unutilized portion of the advance with penal interest

10.6 Effective Period 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.

The Author can be approached at caanitabhadra@gmail.com

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

138 Comments

  1. williams henry says:

    I was not sure of getting a legit loan lender online because of the scams story i hear some years back?But when i could not face my Debt any more and my son was on hospital bed for surgery that involve huge money then i have to seeks for Assistance from friends and when there was no hope any more i decided to go online to seek a loan and i find freedom loan company, here is the email address i followed peterhelpes01@outlook.com

  2. harish oberoi says:

    I would like to say that I availed special package on 31.3.2021 in lieu of home town block year 2018-2021 can I traveled in this year block year 2018-2021.

  3. Harish Oberoi says:

    I have availed special package on 31.3.2021 in lieu of home town can I travel in this year block year 2018 2021 LTC. any govt. . guidelines

  4. BIPIN KUMAR says:

    Maine Feb 2021 me goods purchase kiya but payment Mar 2021 me digitally pay kiya hai.. Kay mai is scheme ka fayda le skta hun????

  5. MRIDUL JACOB says:

    I joined the service on July 2015 and posted in my hometown. I am told I am not eligible for the scheme as according to the LTC scheme for newly recruited employees, my present eligible LTC is hometown LTC and I am not eligible because I am posted to my homettown. What can be the clarification on this?

  6. LK Moundekar says:

    I purchase goods through my spouse bank account and invoice is also her name. Can I entitled for reimbursement. Pl clarify.

  7. Mithu mol says:

    I am in my 8 year of service and I am getting ltc in every calender year.so am I eligible to avail this scheme even after dec 2020.

  8. Ratheesh Kumar A says:

    Maam,
    1. I have availed LTC-177A in the yr of 2020 Nov, since 2018 – till Oct 2020 I haven’t availed any form of LTC, am I eligible for this scheme?
    2. if i wanted to avail LTC 177A in current year (Nov/Dec 2021) is it violates any rule of this scheme?
    3. Please confirm………Regards

  9. chandrashekar BN says:

    I have availed 2014-2017 (extended year 2018) LTC to all india. Can I avail this scheme(LTC special cash package) against my 2021 LTC using bills from 12 oct 2020 to 31 march 2021. Please clarify

  10. Sarika Jain says:

    I am a new recruit joined in Aug 2018. Can I avail LTC special cash package scheme in lieu of Home Town LTC of year 2020 now in Feb 2021. Do I have some document making me eligible for this as my institute says that I should have taken prior approval for the same before 31st Dec 2020.

  11. Madhu says:

    I just want yo know whethr i have to show any flight tickets or boarding passes to claim flight tickets …as i already availed 60days leave bt not claimed any ltc

  12. Suresh says:

    Is it necessity to raise the LTC application before 31/12/2020 to avail the LTC cash purchase scheme for the block 2018-2020. As I understand, as the claim settlement is within 31st March 2021, is it permissible to apply for the block 2018-2020 , even in the prevailing first quarter of 2021

  13. Arun says:

    Please tell me if Level 6-8 as per 7th CPC will be in category of “Employees who are entitled to economy class of airfare”(Rs. 20000/-) or in Rs. 6000/- in respect of scheme (spl cash pack in lieu of LTC BLK yr 2018-21).

  14. pooja says:

    Madam,
    I purchased car in the month December 2020, but I made payment through cheque whether it is permissible or not to avail special package LTC. Kindly give me the clarification madam. Tq

  15. Shwetha says:

    Madam,
    I purchased car in the month December 2020, but I made payment through cheque whether it is permissible or not to avail special package LTC. Kindly give me the clarification madam. Tq

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
March 2024
M T W T F S S
 123
45678910
11121314151617
18192021222324
25262728293031