Leave Encashment
This query is : Resolved
25 January 2010
Dear Sir,
Pls. let me know whether leave encashment paid is taxable or not ? In some of the income tax computation, i understood that LE is partially exempt. If so, pls. let me know the limit of exemption.
with BEST rgds,
Srinath
Pls. let me know whether leave encashment paid is taxable or not ? In some of the income tax computation, i understood that LE is partially exempt. If so, pls. let me know the limit of exemption.
with BEST rgds,
Srinath
25 January 2010
if leave salary is received during service it is taxable for all.
if leave salary is received at the time of retirement/leaving job for Govt. Employees it is tax free u/s 10(10AA).
if leave salary is received at the time of retirement/leaving job for Non-Govt. Employees then minimum of belwo is exempt:
1 10 x avg monthly salary.
2 Rs 300,000/-
3 leave encashment received.
4 accumulated leave in months x Avg monthly salary
Avg monthly salary= avg of immediately 10 month salay basic+DA if terms of employment so provided+commission of fixed % of turnover.
accumulated leave = 30 days for every completed year. now substract leave avail rest is accumulated leave
if leave salary is received at the time of retirement/leaving job for Govt. Employees it is tax free u/s 10(10AA).
if leave salary is received at the time of retirement/leaving job for Non-Govt. Employees then minimum of belwo is exempt:
1 10 x avg monthly salary.
2 Rs 300,000/-
3 leave encashment received.
4 accumulated leave in months x Avg monthly salary
Avg monthly salary= avg of immediately 10 month salay basic+DA if terms of employment so provided+commission of fixed % of turnover.
accumulated leave = 30 days for every completed year. now substract leave avail rest is accumulated leave
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