Leave salary

Save Share

This query is : Resolved

Deepanshu Agg. (Querist)
Follow

22 February 2009 IS leave salary taxable in case of an employee resigning from job?pls quote relevant section of income tax Act.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

23 February 2009 Leave encashment on retirement is exempted u/s 10(10AA). Therefore, leave encashment of other cases is taxable under Income From Salaries.

CA Vivek Jain

CA Vivek Jain (Expert)
Follow

23 February 2009 Leave salary at the time of retirement to other employees -

In the case of a non-government employee, leave salary is exempt from tax to the extent of the least of the following:

Cash equivalent of the leave salary in respect of the period of earned leave standing to the credit of employee at the time to retirement/superannuation (earned leave entitlements cannot exceed 30 days for every year of actual service rendered for the employer from whose service he has retired); or
10 months' 'average salary'; or
Rs 300,000 (applicable from April 1, 1998)
the amount of leave encashment actually received at the time of retirement.

CA Vivek Jain

CA Vivek Jain (Expert)
Follow

24 February 2009 Leave salary at the time of retirement to other employees -

In the case of a non-government employee, leave salary is exempt from tax to the extent of the least of the following:

Cash equivalent of the leave salary in respect of the period of earned leave standing to the credit of employee at the time to retirement/superannuation (earned leave entitlements cannot exceed 30 days for every year of actual service rendered for the employer from whose service he has retired); or
10 months' 'average salary'; or
Rs 300,000 (applicable from April 1, 1998)
the amount of leave encashment actually received at the time of retirement

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now