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

Mukund Seshadri

Mukund Seshadri (Querist)
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15 July 2023 thanks a ton sir when u say retirement, it also means resignation I presume.

Mukund Seshadri

Mukund Seshadri (Querist)
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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)
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15 July 2023 Yes, resignation from any employer is included in retirement term.

Mukund Seshadri

Mukund Seshadri (Querist)
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15 July 2023 thank you for the prompt response

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 July 2023 You are welcome.

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