Calculation of earned leave encashment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 October 2014 Dear Friends,
How many Days should b considered for Earned Leave Calculation?
whether it should be 26 or 30?

In my previous company for Gratuity Calculation 26 days considered.

plz provide link to ACT.
where it is shown. If it is shown in Factories Act Plz provide me link,
so that i can refer. If it is shown in Any other relevant ACT plz provide me link or copy of the ACt for reference.

Thanking you,

Read more at: https://www.caclubindia.com/experts/modify_message.asp?entry_id=899151

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 October 2014 As per factories act:
Annual leave with wages

(1) Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of :-

if an adult, one day for every twenty days of work performed by him during the previous calendar year ;
https://dgfasli.nic.in/html/factyact/cviii79.htm

@VaibhavJ

@VaibhavJ (Expert)
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14 October 2014 Hi

For EL calculation 30 days should be calculated as a general accepted practice & nothing specified by Income Tax act specifically.

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

15 October 2014
Dear Seetaraman sir,

I have gone through the Factories Act...

No where mentioned How many days to be taken in to consideration for EL calculation.

For Eg. If EL is about 15 days for left Staffs from the company, where for Gratuity calculation 26 days taken in to account

And basic salary is 10K,

EL encashment calculation : 10000/30*15 days, = 5000/-

Or 10000/26*15 days = 5769/-

which as correct as per Act?
and
if it is mentioned in Any Relavant ACT plz provide me link..

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 October 2014 In the EL calculation only 30 days is to be taken not 26 days which is applicable only for gratuity calculation.
Your calculation of 5000 is the correct one which is the practice followed in all the companies.

@VaibhavJ

@VaibhavJ (Expert)
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15 October 2014 Agree with expert.

Thanks