Leave salary
This query is : Resolved
Deepanshu Agg.
(Querist)
22 February 2009
IS leave salary taxable in case of an employee resigning from job?pls quote relevant section of income tax Act.
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
(Expert)
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.
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
(Expert)
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
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
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