Revise LFC Encashment Fair Rules For Employees, Income Tax

Leave Fare Concession (LFC) is the additional benefit provided to employees of any sector i.e. Government,PSU, Bank or Private sectors. LFC is the benefit given to permanent employees of the Bank.

LFC is being provided to the employees, Officers to travel any place in India through different eligibility mode of transportation along with their dependent family members. This is to remember that LFC is permissible for journeys within the territories of India only. (Andaman and Nicobar Islands fall within the territory of India)

In the definition of Bank Employees the dependent family members are define as :

[box type=”info” align=”aligncenter” ]The term wholly dependent child/parent shall mean such member of the family having no income or a monthly income not exceeding Rs.2,550/-. If the income of one of the parents exceeds Rs.2,550/- p.m. or the aggregate income of both the parents exceeds Rs.2,550 p.m., both the parents shall not be considered as wholly dependent on the employee.[/box]

LFC Block

For Officers : During each block of 4 years, an Officer shall be eligible for leave fare concession for travel to his/her place of domicile once in each block of two years. Alternatively, he/she may travel in one block of two years to his/her place of domicile and in another block of two years to any place in India by the shortest route.

Read : Calculate 10th Bipartite Revised Salary

Extension of LFC Block 

Under some administrative urgency LFC block of the officers/employees can be considered for extension by the Competent Authority for a period not exceeding 3 months from the due date of the respective block only based on the consideration by branch managers and department heads.

This is to remember that it is purely at the discretion of the Management and thus, cannot be demanded as a matter of right. Divisional Managers/RM/ZM/FGM are empowered to consider requests and approve extensions for officers upto Scale IV coming under their control subject to the following:

a. Extension should be for office exigencies only.

b. Such requests should be made before expiry of the respective block

c. Requests for extension should have been duly recommended by the Branch Manager/Department Head/AGM.

d. Under normal circumstances extension shall be given only up to three months. In special cases, extension for a further period of three months may be considered on a very selective basis and not as a routine that also by HO: HRMS Department only. e. Under no circumstance, extension beyond six months shall be allowed.

Read : Expected Gross Salary For Bank Officers With10% Hike By IBA

Important Rules of Availing LFC in Banks

Following are the common rules prescribed through Bipartite settlement of the Bank employees and followed within banking fertainity among all the Nationalized banks like SBI, PNB, Syndicate, BOI, BOB, Allahabad Banks etc.

  1. For availing LFC an employee should have completed at least 11 months‟ active servic
  2. Permanent part-time employees drawing scale wages are eligible for LFC and leave encashment on pro-rata basis.
  3. An employee can take any kind of leave for LFC. Application for LFC should be sent sufficiently early, say, at least one month in advance.
  4. LFC can be availed during the joining time on transfer also provided the employee combines the same with Casual Leave for one or two days
  5. An employee during his/her LFC may visit different places from the same centre but not the same place more than once.
  6. In case of a physically handicapped employee who is appointed under such category and is eligible for payment of conveyance allowance in terms of the Government guidelines, a companion may accompany the employee provided he/she does not have any member of the family in respect of whom he/she can claim the LFC.
  7. Where husband and wife are both employees of our Bank, only one of them will be eligible to claim LFC reimbursement for both end and the other spouse should surrender his / her corresponding LFC block. It is not necessary that the other spouse should surrender the LFC throughout the career. This will not, however, affect the Privilege Leave encashment for both husband and wife even though one has to surrender the LFC facility.

Read :  RBI Grade B Officers Salary Structure – Rs 13 Lacs Per Annum

LFC Rules for Officers

These are the important LFC rules to be followed by officers of any bank. These are the LFC rules specified for family and other related issues :

  1. Rule of LFC Claim : RuAn Officer may avail the LFC by exercising an option anytime during a 4 year block or two year block, as the case may be, surrender and encash his/her LFC (other than travel to place of domicile) upon which he/she shall be entitled to receive an amount equivalent to 75% of the eligible fare for the class of travel by train to which he/she is entitled upto a distance of 4500 kms (one way) for officers in JMG Scale I and MMG Scale II & III and 5500 kms (one way) for Officers in SMG Scale IV and above.
  2. Encashment of LFC : An officer opting to encash his/her LFC shall prefer the claim for himself/herself and his/her family members only once during the block/term in which such encashment is availed of. The facility of encashment of privilege leave while availing of Leave Fare Concession is also available while encashing the facility of LFC.
  3. LFC May be availed by the Officer’s Family or Officers Himself differently : LFC may be availed by an officer’s family for travel prior to or after the employee himself/herself avails LFC, provided the period between the date of completion of the journey by the family and the date on which the employee commences his/her onward journey or vice versa does not exceed 4 months.
  4. No claim beyond Native Place : An Officer availing LFC to his native place should necessarily touch his native place and is not entitled to claim any fare for the places visited beyond his native place. However, he/she can visit places beyond his native places also, provided he/she does not touch his/her native place more than once.
  5. LFC to be claimed from Place of Posting : Journey in all cases should commence from the place of work of the officer and shall be deemed to have completed as and when he/she reaches his/her place of work. Therefore, journey performed by an officer, after touching his/her working place, shall not be eligible for reimbursement.
  6. Place of LFC to be declared in Application : The Officer should visit the place as declared by him in his leave application and the journey performed by the other members of his/her family under LFC should also be for the pre-announced destinations.
  7. LFC Can be Claimed for Family member even though they don’t reside with officers : An Officer can also claim LFC for eligible members of his family. if they ordinarily do not reside with him/her at the place of work, either for both the way journey from the place where they ordinarily reside to the place of his/her work and to the place of destination or directly from the place where they ordinarily reside to the place of destination and back.
  8. LFC can be claimed through Any Route : An officer availing LFC can take any route and travel in any class to reach the pre-announced destination. But reimbursement will be limited to the fare he is entitled to by the eligible class by the shortest route to the destination declared by him or actual amount of fare incurred, whichever is lower, subject to production of tickets/details of tickets/vouchers.
  9. Different Places on LFC for Family and Officers : An officer and his/her family can opt to travel to different places of their choice, thus there could be different destinations for the family members and the Officer, when LFC is availed under the head Other places. While doing so, the officer should get prior permission for travel of his family and self by declaring the respective destinations

LFC  Encashment

Bank officers may surrender and encash their LFC  (other than travel to place of domicile) upon which he shall be entitled to receive an amount equivalent to 75% of the eligible fare for the class of travel by train to which he is entitled upto a distance of 4500 kms for each of his/her journey (i.e., onward and return journey) for officers in JMG Scale I, MMG Scale II and III and 5500 kms for each of his/her journey for officers in SMG Scale IV and above subject to deduction of admissible Income tax at source.

Example of Encashment of LFC

Suppose as on date , the II Tier AC fare for 4500 kms is Rs. 4000/- per adult passenger Then, he is eligible to draw an amount of Rs. 3000/-  (being 75% of Rs. 4000/-) per unit for his onward journey and a similar amount per unit for his return journey.

In other words, he is eligible to get an amount of Rs. 6,000/- per unit towards encashment of LFC. In case of children aged 5 years and above but less than 12 years, the encashment permissible is half of the eligibility of adult members. There is a provision of Income Tax on LFC encashment amount.

Check : LFC Fare Chart Table By Indian Railways

Income Tax on LFC Encashment among with Encashment of Privilege Leave on LFC

The amount received by the employees on surrendering and encashing privilege leave during service under LFC should be added to the total income and tax should be deducted at source. However, Privilege Leave so encashed should not exceed 10 months in the total service of the employee.

For Details Visit AIIBOA : Here

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