Leave Encashment for Army Officers

Overview

The 2023 handbook permits annual-leave encashment at specified service events and separately with LTC, subject to the verified leave balance and cumulative ceilings. It records a general ceiling of 300 days and an LTC-linked career ceiling of 60 days, but later orders must be checked before reliance (printed pages 58-63; PDF pages 69-74).

What the handbook says

For superannuation, release, discharge on request, invalidment, or death in service, accumulation and encashment are limited to annual leave standing to the officer's credit, subject to 300 days overall and no more than 30 days accumulated in a calendar year. The orders are stated to operate from 1 January 2006 (printed pages 58-59; PDF pages 69-70).

The source separately permits encashment of up to 10 days when availing LTC, subject to an aggregate 60-day career ceiling and at least 30 days of annual leave remaining after encashment and leave actually taken (printed pages 60-61; PDF pages 71-72).

For LTC encashment under the Seventh CPC orders, the handbook identifies pay in the prescribed Pay Matrix level plus Dearness Allowance as the calculation base from 1 January 2016 (printed page 63; PDF page 74).

What this means

Retirement-related encashment and LTC-linked encashment are different provisions. The leave account, event, officer category, previous encashment, and the applicable calculation order must all be checked before an amount can be determined (printed pages 58-63; PDF pages 69-74).

Who this applies to

• Officers cashiered or dismissed from service are excluded from leave encashment under the source summary (printed page 60; PDF page 71).
• Annual leave accumulated during re-employment is excluded, although an eligible re-employed officer may receive LTC-linked encashment within the stated career ceiling (printed pages 60 and 62; PDF pages 71 and 73).
• For SSC officers, annual leave in the year their engagement terminates is not accumulated for encashment; the source separately preserves terminal leave in kind (printed pages 58 and 62; PDF pages 69 and 73).
• LTC-linked encashment requires entitlement to LTC and the source conditions on balance and cumulative use (printed pages 60-62; PDF pages 71-73).

Rates and dates

• General accumulation and encashment: up to 300 days overall, with no more than 30 days accumulated per calendar year, under orders effective 1 January 2006 (printed pages 58-59; PDF pages 69-70).
• LTC-linked encashment: up to 10 days on an occasion and 60 days over the service career, with the cited conditions (printed pages 60-62; PDF pages 71-73).
• The Seventh CPC calculation base stated from 1 January 2016 is Pay Matrix pay plus Dearness Allowance (printed page 63; PDF page 74).

These are a 2023 historical snapshot and are not labelled current.

What you may need

• a verified annual-leave account and year-wise break-up;
• the Part II order notifying leave encashment;
• for LTC encashment, the LTC type, place of visit, and leave period recorded in that order (printed page 63; PDF page 74); and
• evidence that the LTC journey was performed, because the source requires recovery or immediate refund when it is not performed (printed page 63; PDF page 74).

Authorities and source references

• GoI, MoD letter No. B/33931/AG/PS-2(b)/1908/D(AG), 12 April 2010 (printed pages 59 and 62; PDF pages 70 and 73)
• GoI, MoD letter No. 12647/Q Mov C/2610/D(Mov)/98, 11 September 1998, and related LTC encashment orders listed by the source (printed page 61; PDF page 72)
• SRO 12(E), 3 May 2017 (printed page 63; PDF page 74)

Related guidance

• Leave overview
• Leave encashment with LTC
• Retirement benefits

About this guidance

This is a plain-language summary for general information. It is not an official order or an authority for a claim. Confirm the applicable order and your individual eligibility with the competent authority or PCDA(O) before acting.