Leave Encashment
This query is : Resolved
Anil Chavan
(Querist)
26 February 2008
Dear Sir / Madam
If any person left his current job & joined to a new co. in between any financial year. At the time of his leaving he was having 30 leaves balance in his account & co paid him as per the calculation.
In this condition the amount of leave encashment is taxable or not?
Even he is working with his new co. & his salary is taxable.
If any person left his current job & joined to a new co. in between any financial year. At the time of his leaving he was having 30 leaves balance in his account & co paid him as per the calculation.
In this condition the amount of leave encashment is taxable or not?
Even he is working with his new co. & his salary is taxable.
CA. Vineet Grover
(Expert)
26 February 2008
Hi Anil,
Leave encashment is exempt if the same is received at the time of retirement.
In your case, the same does not fall under retirement scheme. hence the same shall be taxable.
Rgds/
Vineet
Leave encashment is exempt if the same is received at the time of retirement.
In your case, the same does not fall under retirement scheme. hence the same shall be taxable.
Rgds/
Vineet
Anil Chavan
(Querist)
26 February 2008
Thanks for your reply
26 February 2008
LEAVE ENCASHMENT IS TAXABLE IN YOUR CASE SINCE IT IS PRE-RETIREMENT
S.Srinivasaraghavan
(Expert)
26 February 2008
PLease refer to section 10(10AA)
The phrase ‘or otherwise’ will cover only such an eventuality when there is severance of relationship of employer and employee or contract of employment - CIT v. Ram Rattan Lal Verma [2005] 145 Taxman 256 (All.).
The phrase ‘or otherwise’ will cover only such an eventuality when there is severance of relationship of employer and employee or contract of employment - CIT v. Ram Rattan Lal Verma [2005] 145 Taxman 256 (All.).
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