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Exemption in Gratuity and Leave encashment.

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(Querist)
04 February 2009 Is the exemption in gratuity and leave encashment available for the lifetime of the assessee or each Assessment year?

What about the employee who resigns and claims Rs. 350000 exemption in gratuity and Rs.300000 in leave encashment?

If the exemption is lifetime, then what should the employer do since it is difficult for him to keep a track of the exemptions claimed by the resigning employee in his earlier jobs?
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CA. B.SRINIVASULU

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CA. B.SRINIVASULU (Expert)
04 February 2009 The leave encashment made at the time of employment is taxable.

The leave encashment made at the time of retirement or at the time of termiantion of emplolyment is exempt subjects to the limit laid down. The limit is life time limit.

Similarly gratutity is also a life time limit.

Get the declaration from the employee that earlier he has not claimed any amount.
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