Income Tax Liability on Payment of leave encashment.

This query is : Resolved

manish jain (Querist)
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03 January 2008
Please clarify the following

1. Whether Leave Encashment is taxable which is paid to employee at the time of full & final settlement on his resignation.

2. Whether Leave Encashment is taxable which is paid to employee at the time of his retirement.

Regards.

Manish Jain
mjain@lc.jkmail.com,manishambika97@gmail.com

Amit

Amit (Expert)
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04 January 2008 Leave encashment received whilst in service is taxable. However leave encashment received at the time of leaving the organisation on retirement or otherwise is not taxable subject to limits

So Leave encashment paid to employee at the time of resignation is not taxable and also at the time reitrement it is not taxable subject to limits specified in th ACt