Leave encashment Section 10(10AA)

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This discussion clarifies the leave encashment exemption limit for the Assessment Year 2023-24. While an enhanced exemption of 25 lakhs was announced, it is confirmed that for AY 23-24, the limit for private sector employees remains at 3 lakhs. This limit applies to both retirement and resignation from employment.

Mukund Seshadri

Mukund Seshadri (Querist)

15 July 2023 Hi team,

Any idea if the enhanced exemption of 25 lakhs under leave encashment for pvt sector is available for AY 23-24. It was announced on 24th May 2023. However , will this be effective for AY 23-24. or is it still 3 lakhs only ?

Thanks
Mukund

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

15 July 2023 For AY 2023-24, the limit remains 3 lakhs only (on retirement for private organization employees)

Mukund Seshadri

Mukund Seshadri (Querist)

15 July 2023 thanks a ton sir when u say retirement, it also means resignation I presume.

Mukund Seshadri

Mukund Seshadri (Querist)

15 July 2023 thanks a ton sir when u say retirement, it also means resignation I presume. meaning say i am on a break in between jobs and have my leave salary encashed from the previous organization

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

15 July 2023 Yes, resignation from any employer is included in retirement term.

Mukund Seshadri

Mukund Seshadri (Querist)

15 July 2023 thank you for the prompt response

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

15 July 2023 You are welcome.

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