LTC Cash Voucher Scheme: Here Is All You Need To Know


Finance Minister Nirmala Sitharaman on Monday announced two schemes viz. LTC Cash Voucher Scheme and Special Festival Advance Scheme to primarily benefit central government employees.

LTC Cash Voucher Scheme

Under LTC Cash Voucher Scheme, government employees can opt to receive cash amounting to leave encashment + 3 times the ticket fare, to buy something of their choice. The items bought should be those attracting GST of 12% or more. Only digital transactions are allowed, GST Invoice to be produced.

The biggest incentive for employees to avail the LTC Cash Voucher Scheme is that in a four-year block ending in 2021, the LTC not availed will lapse, instead, this will encourage employees to avail of this facility to buy goods which can help their families.

Estimated cost of LTC Cash Voucher Scheme: For Central govt. : ₹ 5,675 crore; for PSBs & PSUs: ₹ 1,900 crore.


Tax concessions for LTC tickets available for state govt. & private sector too, if they choose to give such facility, these employees too can benefit

Indications are that savings of govt. and organized sector employees have increased, we want to incentivize such people to boost demand for the benefit of the less fortunate. On a conservative basis, we expect the LTC Cash Voucher Scheme to generate additional consumer demand in the range of ₹ 28,000 crores.

– Union Finance Minister Smt. Nirmala Sitharaman

Here is all you need to know about LTC Cash Voucher Scheme

1. “Indications are that savings of government and organized sector employees have increased, we want to incentivize such people to boost demand for the benefit of the less fortunate,” the Finance Minister said.

2. Under the LTC cash voucher scheme, government employees can opt to receive cash amounting to leave encashment and three times the ticket fare to purchase items that attract GST of at least 12 percent.


3. This amount can be spent only on buying non-food GST-rated items and the purchases will have to be made in digital mode from GST-registered outlets, the Finance Minister said.

4. The money was originally meant to be utilized by government employees for leaves that got wasted due to the coronavirus pandemic-related restrictions.

5. Since travel is difficult to undertake during the pandemic, the government will pay the entitled fare as cash vouchers which have to be spent by March 31, 2021, Ms. Sitharaman said.

6. These benefits will cost the government around ₹ 5,675 crores. The government has also allowed public sector companies such as state-run banks to avail of this facility. For them, the cost will be ₹ 1,900 crores.


7. The Finance Minister also announced the reintroduction of a festival advance for central government employees through the Special Festival Advance Scheme, till March 31. This advance was abolished as per 7th Pay Commission recommendations.

8. As a one-time measure, an interest-free advance will be given to all officers and employees of the central government, the Finance Minister said.

9. Under this scheme, an interest-free advance of ₹ 10,000 will be given to government employees through a pre-loaded RuPay debit card. This money will be recoverable in 10 installments, till March 31. The expenditure on this is estimated at ₹ 4,000 crores, according to the government.

10. The announcements come at a time when the country’s GDP or gross domestic product contracted a record 23.9 percent in the April-June period as the quarter fully captured the damage caused by the coronavirus pandemic-related restrictions. The RBI has said the GDP is likely to shrink 9.5 percent in the current financial year.


(With Inputs From PIB & NDTV)

Follow and connect with us on Facebook, Twitter, LinkedIn, Instagram and Google News for the latest travel news and updates!

Also Read: 8 Beaches of India Get ‘Blue Flag’ Certification


Manish Khandelwal
Manish Khandelwal

Manish Khandelwal, a travel-tech enthusiast with over a decade of experience in the travel industry. Founder and Editor-in-Chief of, he's passionate about writing.

Articles: 6183