Leave Encashment
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
05 February 2010
Pls tell me that leave encashment is totally expamt in which case, or exampt upto a specified limit for which catogory of employees.
2) give an exmaple of computatiion of specifie limit
2) give an exmaple of computatiion of specifie limit
CA Prashant Gupta
(Expert)
05 February 2010
leave salary is exempt at the time of retirment to govt employees u/s 10(10AA).
for other employee at the time of retirment least of below is exempt:
1 months of earned leave x Avg Salary
2 10 x Avg salary
3 Rs 300000/-
4 leave salary received.
for months of earned leave: take 30 days for every completed year and subtract leave taken. No convert rest in months
Avg Salary: immediatley preceeding 10 month salary avg. it includes basic+DA if term of employement provided+ fixed % of commission
example: Mr. A retires 16 March 2009. he worked 32 year 3 month. he taken 120 day leave. Salary is basic 5000 and no other. he got leave salary of rs. 200000
leaves 30 x 32 =960 days - 120 days = 840
avg salary 5000*10/10 = 5000.
months 852/30 = 28
so least of below
28 x 5000 = 140000
10 x 5000 = 50000
300000
200000
for other employee at the time of retirment least of below is exempt:
1 months of earned leave x Avg Salary
2 10 x Avg salary
3 Rs 300000/-
4 leave salary received.
for months of earned leave: take 30 days for every completed year and subtract leave taken. No convert rest in months
Avg Salary: immediatley preceeding 10 month salary avg. it includes basic+DA if term of employement provided+ fixed % of commission
example: Mr. A retires 16 March 2009. he worked 32 year 3 month. he taken 120 day leave. Salary is basic 5000 and no other. he got leave salary of rs. 200000
leaves 30 x 32 =960 days - 120 days = 840
avg salary 5000*10/10 = 5000.
months 852/30 = 28
so least of below
28 x 5000 = 140000
10 x 5000 = 50000
300000
200000
CMA Ramesh Krishnan
(Expert)
05 February 2010
agree with Mr.Prashant
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