The LTC Special Cash Package and Leave Encashment calculator is designed to calculate the amount to be allowed for encashment of Earned Leave and reimbursement of Cash Equivalent to LTC Fare
As per this LTC Cash Package, 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 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.
Leave encashment Taxability and Income Tax Exemption for LTC Special Cash Package
TDS is applicable in the case of leave encashment.
But TDS shall not be required to be deducted on the reimbursement of deemed LTC fare, , 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.
Less Spending Less LTC Cash Package – Why should Leave Encashment be reduced?
There is another issue in the Calculation of LTC Special Cash Package and Leave Encashment
In the element of Leave Encashment Share, the Government Servant is forced to claim less amount in respect of Leave Encashment if the total amount spent is less than the Total Amount to be Spent for full cash Benefit.
Leave Encashment is different element than the share of LTC Fare. Leave encashment is calculated from the Basic Pay of the Government Servant, not from the LTC fare entitlement. Why should one go for encashment of EL for less amount than what he is entitled to?
This need to be paid separately by not linking with the total amount spent for claiming LTC Special cash package.
If one spends less amount than the Total amount to be spent for full cash benefit,
The amount of Leave Encashment should be deducted from the total amount spent and the share of LTC fare can be calculated from the remaining amount. Accordingly, the formula should be derived and the percentage of LTC Fare should be increased. This needs to be taken up by the appropriate authority to resolve this discrepancy.
But this LTC Special Cash Package and Leave Encashment calculator calculates the Share of Leave encashment and LTC fare as per the example given in the order issued by Department of Expenditure on 12th October 2020 [ See the Examples]
Category wise Deemed LTC Fare for Special Cash Package
Category wise 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
There are two results are shown in the result page if LTC Cash Package is availed and amount spent is less than the Amount to be spent for full cash benefit.
So, the result of this LTC Special Cash Package and Leave Encashment calculation will be the following
- Amount to be spent for Full Benefit of Leave Encashment and LTC Fare deemed
- Share of Leave Encashment and LTC fare if total amount less than the above.
So, you can calculate the amount to be spent for full benefit from LTC Special Cash Package and Leave Encashment and
If you want to spend less than the above, you can calculate the share of Leave Encashment and LTC fare.
Here is the LTC Special Cash Package Calculator
Select your Pay details and deemed LTC Fare in the relevant field
LTC SPECIAL CASH PACKAGE CALCULATOR 2020