Calculation of amount payable for leave encashment

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S.G.Kulkarni

S.G.Kulkarni (Querist)
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02 November 2013 How to calculate Leave encashment amount in case of contractual employees. Is it Basic + DA or only Basic.

Under which act it is mentioned?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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02 November 2013 refer to section 79 of the Factories Act 1948

S.G.Kulkarni

S.G.Kulkarni (Querist)
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02 November 2013 Thanks for looking into my question .

What will happen in case of the concerns to whom Factories Act do not apply ?

If a company is dealing purely in service industry , which act is to be taken as base for calculating amount of leave encashment for contractual employees ?

@VaibhavJ

@VaibhavJ (Expert)
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02 November 2013 Hi,

Provision of leave depends upon the applicable laws e.g. the industry/location, factories act if yours is a factory, Local Shops and establishment act if its an establishment.

It is calculated on wages as per Minimum wages Act hence Basic + DA is to be considered.

Pl refer file for calculation: https://www.caclubindia.com/share_files/leave-encashment-calculator-51638.asp

Thanks//VaibhavJ

@VaibhavJ

@VaibhavJ (Expert)
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02 November 2013 See link for detailed understanding on its calculation:

https://www.indiataxes.com/Information/incometax/contents/salaries/taxationofsalaries/sal_leave_sal.htm

Thanks//VaibhavJ

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