Income tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 August 2011 plz explain the concept of leave encashment and its practical applications and what points are to be kept in mind.

CMA. Murali

CMA. Murali (Expert)
Follow

11 August 2011 Leave Encashment received during the course of service is fully taxable for Govt and Non-Govt Employee.

Leave Encashment received at the time of retirement is fully exempt for Govt Employee as per sec 10(10aa)(i).

Leave Encashment received at the time of retirement is partly exempt for Non-Govt Employee as per sec 10(10aa)(ii).
Encashment of earned leave on retirement would however, be exempt to the extent of least of:

i. 10 months salary calculated on the basis of last 10 months average salary or

ii. Rs. 3,00,000

iii. Amount equivalent to earned leave

iv. Actual amount paid by the employer

Entitlement to earned leave not to exceed 30 days for every year of actual service.

Limits provided for aggregate maximum from any number of employers.

Encashment of earned leave on retirement would be wholly exempt for employees of Central/State Government.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

13 August 2011 I agree with the expert

CA. Krishna K Neeraj

CA. Krishna K Neeraj (Expert)
Follow

15 August 2011 Agree with Murali

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Rajat Khandelwal

Choudhary

HITESH NIRANJAN SAHU

Tax Expert Group

N.Chandrasekaran

Subscribe Now

Income tax

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Article Assistant

GST CONSULTANCY

GST CONSULTANT

Manager- Finance and Compliance

CA Final

Accountant