LTC Cash Package for Central Government Employees – Consolidated Instructions

LTC Cash Package for Central Government Employees valid up to 31st March 2021 – Consolidated Guidelines and Instructions by Government so far

Rule 38A of CCS Leave Rules allows encashment of of 60 days earned leave subject to maximum of 10 days for each spell while a Central Government Employee avails Leave Travel Concession. One of the main conditions under this regular scheme of Encashment of Earned leave is

(i) Employee can Encash EL only when he / she avails LTC and undertakes travel to the declared destination.

Considering the disruption in Transport and Hotel sector due to lockdown condition impacted by COVID-19 and the need for improving public spending at the same time, Govt has come up with a scheme called Special Cash Package Equivalent in lieu of LTC Fare and Leave Encashment for Central Government Employees for the LTC Block of 2018-21.

As per this novel scheme valid until 31st March 2020, Cash Equivalent of LTC comprising Leave Encashment and LTC Fare at flat rate (Deemed amount based on the Pay Level of the Employees) will be paid if a Central Government Employee is willing to opt for this scheme and spends equal to Leave Encashment amount and Three times of Deemed LTC Fare allowed, towards purchase of items or availing of services which carry GST Rate of not less than 12%. The payment has to be made for the purchases / availing of services through Digital mode and a voucher / invoice has be obtained by the employee indicating the GST Number of the supplier and the amount of GST paid.

LTC especial Cash Package Scheme can be utilized by an Employee either for the maximum amount for which he / she is entitled to or for the reduced amount. In the case of an employee is opting for availing the scheme for a lesser amount than the actual entitlement, he is allowed to get the cash amount as per the following calculation.

Cash amount to be paid under LTC Cash Package Scheme = (Maximum Cash amount Eligible / Maximum amount to be spent as per the pay level and Basic Pay)X Amount actually spent by the employee

Other important aspect of the scheme are as follows:

1. Since this scheme is an alternative to existing LTC and Encashment of Earned Leave, administration will deduct EL utilized for the cash encashment from the leave account for the employee subject the maximum of 10 days.

2. While EL encashment component in the scheme is taxable, LTC fare paid is exempted as per the present income tax regulations.

3. An amount up to 100% of leave encashment and 50% of value of deemed fare can be claimed as advance. Once the employee produces the receipts for the purchases and availing of services full claim will be settled. Unlike regular LTC scheme, final claim of the employee need not be within one month from the date of the advance disbursement. It is stipulated that final claim has to be made by an employee on or before 31st march 2020.

4. The invoices of the goods and services purchased as per the scheme may in the name of spouse or any family member who are eligible for LTC Fare.

5. There is no need for the employee either to proceed on leave or undertake travel.

6. The part benefit the LTC cash package can also be utilized by the employee. In other words only LTC fare cash benefit can be utilized without availing EL Encashment benefit.

7. There is no prescribed format for opting LTC cash package scheme. A simple willingness to avail the scheme with the basic details such as present pay level and basic pay drawn etc., would suffice.

8. In the case of both Husband and Wife are working for Central Government, LTC Cash Package can be availed by both in such a way that either Husband or Wife can avail cash benefit for LTC and EL Encashment while the other can avail only the cash benefit equivalent to EL Encashment quoting the LTC claim utilized by the spouse.

9. Purchase of Goods or Services on EMI basis is also covered under the LTC Cash Package Scheme as per the Question No: 6 answered in FAQ-2 issued by the Govt.

10. Payment of premium for Insurance Policies taken after 12.10.2020 and before 31.03.2021 will be considered as spending under LTC Cash Package Scheme. Premium paid for the existing policies will not be allowed.

Checkout all Office Memorandums issued so far by Department of Expenditure, Ministry of Finance on LTC Special Cash Package Scheme

LTC Special Cash Package for Central Government Employees – Order dated 12.10.2020

Special cash package in lieu of LTC Fare for CG Employees during the Block 2018-21: FAQ-1

Special cash package equivalent of LTC Fare for CG Employees: FAQ-2

FAQ No.3 – Special Cash Package equivalent in lieu of LTC Fare: FinMin Clarification

LTC Cash Package in lieu of LTC Fare – Purchases can be made in the name of spouse and other family Members

Estimate LTC Cash Package (LTC Fare and EL Encashment) applicable on the basis of 7th CPC Pay Matrix Level and Basic Pay