The LTC Cash Voucher Scheme: How Employees Claimed LTC Without Travelling
In October 2020, the country was locked down, trains were half-empty, and nobody wanted to travel. But the LTC block was still ticking, and a whole block was about to lapse unused for lakhs of Central Government employees. So the government did something unusual — it let us claim our Leave Travel Concession without going anywhere.
That was the LTC Cash Voucher Scheme, officially the Special Cash Package in lieu of LTC fare. The catch: instead of a train or air ticket, you had to spend the money — three times your deemed fare, on goods and services, with GST of 12% or more. This calculator reconstructs exactly how much you could have claimed and how much you needed to spend. Even though the window has closed, it is still one of the most-searched scheme calculators, because people are working out old claims and understanding how the deemed-fare maths worked.
What the scheme actually was
Leave Travel Concession normally reimburses your travel fare when you actually travel — home town or all-India, once in each two-year sub-block. During COVID-19, the government converted the fare element into a cash benefit you could claim by spending instead of travelling.
The deal had two moving parts: a deemed LTC fare (a fixed notional ticket price), and a spending requirement of three times that fare. Meet the spending conditions, and the deemed fare came back to you tax-free under the normal LTC exemption. Miss them, and the reimbursement was cut proportionately.
It was, in effect, a way to inject demand into the economy during the festival season while letting employees salvage an LTC that would otherwise have lapsed.
The deemed fare slabs
The notional fare depended on your travel entitlement, not on where you "would have" gone:
| Travel entitlement | Deemed fare / person | Spend needed / person (3×) |
|---|---|---|
| Business-class airfare | ₹36,000 | ₹1,08,000 |
| Economy-class airfare | ₹20,000 | ₹60,000 |
| Rail fare, any class | ₹6,000 | ₹18,000 |
The deemed fare was then multiplied by the number of family members availing — so a rail-entitled employee claiming for a family of four had a deemed fare of ₹6,000 × 4 = ₹24,000, and needed to spend ₹72,000 to claim it in full. The calculator above does this multiplication for you.
The 3× spending rule and its conditions
This was the heart of the scheme, and where most claims went wrong. To get the full deemed fare back, you had to spend three times the total deemed fare, and every rupee had to satisfy all of these:
- Purchases of goods or services with GST of 12% or more — not exempt or 5% items.
- Bought from a GST-registered vendor, with a proper tax invoice showing the GSTIN.
- Paid digitally — card, UPI, net-banking — never cash.
- Incurred within the window, 12 October 2020 to 31 March 2021.
If you spent less than the full 3×, the reimbursement was pro-rata. Spend two-thirds of the requirement and you got two-thirds of the deemed fare. This is exactly what the "amount actually spent" field on the calculator models — leave it at zero to assume the full spend, or enter a real figure to see the reduced payout.
The leave encashment add-on
There was a second, optional layer. Alongside the fare, employees could also encash up to 10 days of Earned Leave as part of the same LTC, and that leave encashment cash equivalent — pay plus DA for those days — was also allowed under the package, subject to its own spending condition.
For most people the fare portion was the main event, but if you were also encashing leave, remember that the leave-salary maths is separate. To see how leave encashment is valued in general, use the EL Encashment calculator; for the full rules on leave travel, blocks and entitlements, the LTC complete guide is the place to start.
Why it mattered — and why people still calculate it
At first glance, "spend ₹60,000 to get ₹20,000" sounds like a bad trade. It was not, and here is why: the ₹20,000 came back tax-free, and you were spending on things you would likely have bought anyway during Diwali — a fridge, a phone, furniture, tyres, a laptop for the kids' online classes. For someone in the 30% bracket, a tax-free ₹20,000 is worth roughly ₹28,500 of taxable salary. Stack that with the leave encashment and it was genuinely worth the paperwork.
People still search for and calculate this today for two reasons: reconstructing an old claim for records or an assessment query, and simply understanding the deemed-fare concept, which reappears whenever a similar package is discussed.
Is anything like it available now?
No. The scheme was a one-time, pandemic-era measure and its window closed on 31 March 2021. It has not been renewed, and there is no standing equivalent.
What is permanent is ordinary LTC — the fare reimbursement you get when you actually travel. If you are planning a real journey, the entitlements by pay level, the home-town versus all-India rules, and the 4-year block structure are all covered in the LTC guide. And because any LTC reimbursement interacts with your taxable salary, it is worth checking your position under both regimes with the income tax calculator before you file.
Worked examples
A rail-entitled employee claiming for a family of four
Total deemed fare = 6,000 × 4 = ₹24,000.
Spend needed to claim it in full = 24,000 × 3 = ₹72,000, on GST ≥ 12% goods, paid digitally, within the window.
Because the full ₹72,000 was spent, the entire deemed fare of ₹24,000 was reimbursed tax-free.
Had the employee spent only ₹48,000 (two-thirds), the reimbursement would have been pro-rata: 24,000 × (48,000 ÷ 72,000) = ₹16,000.