I am sharing here the details of Motor Car Advance (MCA) for Government Employees. Many employees don’t know the procedure to employee, the amount of the advance, the interest amount on MCA, the number of installments to refund the amount along with interest, etc. You will read in this article the details of the following:
Motor Car Advance (MCA) for Government Employees
The motorcar advance generally gets the Federal Government employees. In Khyber Pakhtunkhwa, only a minor amount of MCA is granted which is not sufficient to get a motor car. The Punjab Government also grants the same but on a very specific condition that a common employee cannot fulfill. Keeping in view the fact we shall only discuss the MCA for the Federal Government employees. We shall discuss the following in this regard:
- Procedure to Apply for Motorcar Advance
- Minimum Basic Pay to Get MA
- Total Allotment of MCA amount
- Number of Installment to refund the amount
- Interest Amount on Motorcar Advance and Interest Calculation Formula
- Interest-Free Motorcar Advance
- 2nd MCA
- Motorcar Advance for Punjab Govt Employees
- Motorcar Advance for KP Govt Employees
Procedure to Apply for Motorcar Advance (Federal Employees)
The procedure to apply for motorcar advance is simple. In most of the departments, there is Motor Car Advance Proforma. Just fill in the same and attach the relevant documents. The documents may be an appointment letter/promotion letter or CNIC of the employee.
Minimum Basic Pay to Get MA
To get a motorcar advance (Federal Government Employee) the minimum basic pay should be Rs. 35,000/-. Per month. If the Basic Pay of the Federal Government employee is less than Rs. 35,000/- per month then the employee is not eligible to apply for MCA.
The employees of BPS-16 and below can also get the Motorcar Advance if they have a minimum basic pay of Rs. 35,000/- per month. The Finance Division Government has already issued the Clarification Regarding Admissibility Motorcar Advance for Federal Government employees.
Total Allotment of MCA amount
The total amount of allotment for motorcar advance for the Federal Government employees is Rs. 1 million (Rs. 10,00,000/-).
Number of Installment to refund the amount
The total number of installments to refund the amount of MCA are 60 i.e. the employee will refund the amount of advance in 5 years.
Per Month Installment
As the total amount of loan for a motorcar is I million and the refundable period is 5 years, the amount of installment is as under:
Per Month Installment = 1000000/60 = 16667/-
Thus the employee has to pay Rs. 16667/- per month as installment of motorcar advance.
Interest Amount on Motorcar Advance and Calculation of Interest Formula
If the employee is not getting any interest on the GP Fund, then the calculation of the Interest amount is as under:
Amount of advance x (No. of Inst. +1) x Rate of Interest/2400
Example of calculation interest: 1000000 x (60+1) x 13/2400 = 330417
Total refundable amount = Rs. 13,30,417/-
Note: Interest Rate is the GP Fund Interest of the financial year during which the MCA is withdrawn/taken.
If you don’t want to calculate manually the interest amount, I have prepared the calculation Sheet for MCA, and MCycle HBA advance for the Federal Government employees.
Interest-Free Motorcar Advance
If the employee wants to get an interest-free loan for MCA then he should apply for interest free GP Fund. If the employee has a GP Fund interest-free then the employee is eligible for all kinds of advances interest-free from the department. So the employee must have interest interest-free GP Fund to get interest interest-free loan for motor car advances.
2nd MCA Advance
The employee can get motorcar advance 2nd time too if he has already paid/refunded the actual amount of advance and Interest amount (If any). In this regard, the employee must attach the clearance certificate of payment from the accounts office along with the application form for 2nd advance. I have already published the clarification grant second motorcar/motorcycle and cycle advance for the FG employees.
Motorcar Advance for Punjab Govt Employees
The advance may be. sanctioned to a Government servant for the purchase of a motor
car subject to the following conditions: –
1- An advance will be given only when the Government considers that it is in the interest of the public service that the Government servant should use a car in the
discharge of his duties. Advances can only be granted to such Government servants as are compelled in
the course of their official duties to do much touring or to make frequent journeys at short notice, or where the saving of time is of real importance.
2- The total amount to be advanced to a Government Servant shall not exceed Rs. 35.000.00 or 18 months’ pay or the anticipated price of the car whichever is
less. If the actual price paid is less than the advance taken, the balance should be forthwith refunded to the Government.
Since Government servants drawing less than Rs. 112,320/- as pay plus special pay are not eligible to maintain the car, they shall not be entitled to Motor Car Advance.
The Punjab Government has also launched a scheme of motorcycles for students and they can apply online for motorcycle on easy installments with no interest as the interest amount will be paid by the Punjab government.
Motorcar Advance for KP Govt Employees
The employees of Khyber Pakhtunkhwa can also get motorcar advances. Every year the KP Government gives an ad for the application to apply for the loans including MCA. In 2023, too KPK Government announced for Interest-Free MCA/Motorcycle/Cycle Advance 2023-24 KP. The KPK employees of BPS-17 and above can only apply for MCA. They will get Rs. 200,000/- (two lacs) as a loan to buy a car. The employees have to refund the amount in 60 monthly installments. They will have to pay Rs. 3334/- per month for the motorcar advance. The table of MCA for KPK employees is as under:
| Sr. No | Items for Debt | Basic Pay Scale | Maximum Amount of Debt | Monthly Deduction | No.of Monthly Instalments |
| 1. | Motor Car Advance | BPS-17 and above | Rs.200,000/- | Rs.3,334/-
|
60 |
