This discussion clarifies the taxability of Earned Leave (EL) encashment for employees who are still in service. Contrary to a common belief, EL encashment while in service is taxable for all employees, including those in the public sector and government roles. It is not tax-free for central or state government employees.
01 February 2022
sir, is EL encashment while in service tax free for public sector employees. as per my understanding it is tax free for both central and state govt employees alone. is it correct sir pl clarify.