Leave encashment rules for central government employees

Leave encashment rules for central government employees

About Leave encashment rules for central government employees:

Before knowing about the leave encashment rules, you should know what actually it is. If you are a government employee then you might be aware of this word earlier. If not, we will let you know every corner of this aspect. Just have a pretty attention towards this blog.

Leave encashment in general terms refers to claiming unused paid leaves. A leave will be entitled with the full salary segregated per day. In simple terms, utilization of unused paid leaves. It is beneficial while at the time of retirement period. Or can make use of it while leaving the job. The full-day / half-day leave can be attained in the form of encashment. Those leaves count as admissible for up to a maximum of 300 days. 


Leave encashment rules for central government employees:

  • There are some rules to be followed for obtaining the encashment leaves. Just make sure to obey them while applying for it. Just in case to prevent any unforeseen misinterpretations further. 

  • The rules of the leave encashment can be referred to in the CCS rules 1972, provided for all central government employees.

  • It is granted only in case of any unused paid leaves for the entire service.

  • Both full/half-day leaves can be attained under leave encashment.

  • Encashment leaves were provided for up to a maximum of 300 days. 

  • Half days were not admissible to count as full paid leaves.

  • The leave policy and the provided emoluments might be varied from one to another employee.

Leave encashment calculator: 

One can easily calculate the total emoluments received under the leave encashment. If you are an employee with maximum unused paid leaves. Then this calculator tactic would be beneficial. We will help you to know the basic details of this method. Let’s take one practical example to get a crystal clear idea. 

A central government employee earns 70,000/- per month. Obviously, his salary per day counts as 2,333/-. As we already know that the maximum leaves were provided for up to 300 days. So just calculate  

                                                              =  70,000/30 = 2,333/-

                                                       =  2,333*300 (maximum days)

                                                       =  Rs. 699,900/-

This is the traditional method of calculating Leave encashment. Here, only the value of unused leaves will change(i.e. 300). But the entire procedure remains the same. You just need to put the value of how many days you're left with in that calculation.

  • How to calculate

  •  Leave encashment for earned leave:

There is one such formula as shown below 

Formula for earned leave    =   DA + basic salary pay x No. of          

                                                                                    unused earned leaves/ 30

  • Leave encashment for half pay leaves:

If the earned falls short of providing 300 days, then the pay for half-day leave will be taken into consideration. 

Formula for half pay leaves =DA + half basic pay x No. of unused half  

                                                                                                           pay leaves/ 30

Leave encashment exemption: 

Leave encashment exemption 

Here the word exemption simply defines tax exemptions. There is one such situation where the tax is imposed over the emoluments provided under leave encashment. It is legalized by the Indian government to impose a tax on their respective departmental employers. But don’t worry! We have got you some good news on this aspect. 

Section 10(10A(a)) under the Income tax act has provided some laws to exempt the tax up to some extent. If you are a government employee, then there is no tax levied upon the leave encashment. But a limited tax will be imposed on non-government employees. 

How to apply for Leave encashment:

That encashment pay differs from one to another also received by their respective employer. So one must make a request to their employer/ superior of the department. Stating the requirement for claiming leave encashment. It just follows a simple procedure as described below. 

Step 1 - Requests must be in writing to their employer/ one who provides the pay.

Step 2 - Click on intranet/downloads/ENCASHMENT

Step 3 - There you can find a format like the required details to fill up in the application. Like -

  • Name

  • Designation

  • Branch

  • Employment ID

  • Total No. of days under encashment leave

  • Block year

  • Declared hometown 

  • Form of request

  • Places visited for hometown

  • Hometown of the applicant 

Step 4 - Then one must submit his/her request application to their employer. 

Step 5 - This application should be signed by their employer/HOD/Divisional officer.

Step 6 - followed by filing an application for the necessity and purpose of the candidate’s intention for leave encashment. It generally involves :-

  • Hometown of the applicant as per service book

  • Applicability of LTC to required region 

  • Nature and period of granted leave 

  • No. of leaves entitled for encashment 

Step 7 - Where it is officially granted by the signature of the departmental executive/ undersecretary.  

Conclusion: 

This blog states all the aspects pertaining to leave encashment rules for central government employees. You can find rules, an encashment calculator, tax exemption guidance, and procedure to avail of encashment. Hope you find something informative. Follow our page for more updates on related articles. Thank you.


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