Government servants in India are entitled to a Leave Travel Concession (LTC) to visit their home towns or travel within India. Alongside this, the Central Civil Services (Leave) Rules allow employees to encash earned leave up to ten days while availing LTC, providing both financial benefit and flexibility in planning leave.
1. What is Earned Leave Encashment with LTC?
Earned leave encashment with LTC is a facility where a government servant can receive cash for up to ten days of earned leave while going on a sanctioned Leave Travel Concession.
- This is in addition to the actual leave being availed for LTC.
- The cash is calculated based on basic pay plus dearness allowance.
- House Rent Allowance is not included in the cash calculation.
Illustration:
Mr. A plans to travel on LTC for 15 days. He has 50 days of earned leave at his credit. He can encash up to 10 days of earned leave while using the remaining leave for his travel.
2. Conditions for Encashment
To avail this facility, the following conditions must be met:
- Minimum Earned Leave Balance:
- At least 30 days of earned leave must remain in the leave account after accounting for both the leave being taken and leave encashed.
- Maximum Encashment in Career:
- A government servant cannot encash more than 60 days of earned leave during the entire career under this provision.
- Calculation of Cash Equivalent:
Cash Equivalent=Pay + Dearness Allowance30×Number of Earned Leave Days Encashed (Max 10)\text{Cash Equivalent} = \frac{\text{Pay + Dearness Allowance}}{30} \times \text{Number of Earned Leave Days Encashed (Max 10)}
- Only basic pay and dearness allowance are considered.
- House Rent Allowance is excluded.
Illustration:
Ms. B has a pay of ₹50,000 and dearness allowance of ₹15,000 per month. She encashes 10 days of earned leave while going on LTC.
Cash equivalent = (50,000+15,000)/30×10=21,666.67(50,000 + 15,000)/30 \times 10 = 21,666.67 rupees.
3. Leave Account and Encashment Rules
- The period of earned leave encashed under LTC is not deducted from the normal leave encashment entitlement available at retirement under Rules 6, 39, 39-A, 39-B, 39-C, and 39-D.
- The encashment is considered additional and separate from retirement leave encashment.
4. Refund Obligation if LTC is Not Availed
If a government servant fails to avail LTC within the prescribed period under the Central Civil Services (Leave Travel Concession) Rules, 1988, the following applies:
- Refund: The entire amount of leave encashed must be refunded.
- Interest: Refund includes interest at 2% above the Provident Fund interest rate.
- Leave Credit: The leave days that were encashed are credited back to the employee’s leave account.
Illustration:
Mr. C encashes 10 days of earned leave for LTC in January but does not travel within the prescribed period. He must return the encashed amount with interest, and the 10 days are restored to his leave account.
5. Key Takeaways
- Earned leave encashment up to ten days is allowed while availing Leave Travel Concession.
- Minimum leave balance of 30 days must remain after encashment.
- Maximum 60 days encashable during entire career.
- Cash is calculated on basic pay and dearness allowance, excluding house rent allowance.
- Leave encashed under this provision does not reduce retirement encashment entitlement.
- Failure to avail LTC in time requires refund with interest and crediting leave back.
6. Practical Example
Scenario:
- Ms. D has 45 days of earned leave.
- She plans 15 days LTC travel.
- She encashes 10 days of earned leave during LTC.
- Post-LTC, she has 30 days of earned leave remaining, fulfilling the minimum balance requirement.
If Ms. D fails to travel within the prescribed period:
- She refunds the encashed leave salary with interest.
- Her leave account is restored to 40 days (10 days encashed are credited back).
