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.
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.).
CAclubindia
