Leave encashment at the time of retirement

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Querist : Anonymous

Querist : Anonymous (Querist)

18 April 2014 whether leave encashment at the time of retirement of PSU is exempt from tax or not?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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18 April 2014 complete exemption under section 10AA(1) of the Income-tax Act, 1961 is provided only to central govt or statement employees.

PSU employees are not covered therein but under 10AA(2) wherein you need to compute the exemption as per the provisions provided therein subject to maximum of Rs 3 lakhs

Rupesh Jain

Rupesh Jain (Expert)
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19 April 2014 UNDER CENTRAL GOVT EMPLOYEE AND STATE GOVT EMPLOYEE

LEAVE ENCASHMENT WILL EXEMPT U/.S 10

BUT FOR IN YOUR CASE YOU HAVE TO COMPUTE THE EXEMPTION

1. AMOUNT OF LEAVE 30 DAYS FOR EVERY YEAR OF SERVICE ON THE BASIS OF LAST SALARY FOR SUPERANNUATION
2. 10 MONTH AVERAGE SALLRY
3. RS.10,00,000/-
4. ACTUAL AMOUNT RECD.

WHICH EVER IS LESS WILL EXEMPT