Taxability on Leave Encashment

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Sandeep Nair (Querist)
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31 March 2010 Hi,
Is Leave Encashment taxable while an employee resigns from a company? What is the meaning of "Retirement" with respect of Leave Encashment?

Regards
Sandeep Nair

sivadas chettoor

sivadas chettoor (Expert)
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01 April 2010 The employee may retire from the organisation in so many ways. The word retirement is not defined under the Act. The common dictionary meaning is "removal or withdrawal from service, office, or business". Therefore , according to me a resignation is also equivalent to retirement.My view is supported by the decision CIT V Shahney decided by the Hon' Madras High Court-159 ITR 160 and Hon' Bombay High Court in 229 ITR 394.

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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01 April 2010 Agree with expert Sivadas.

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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01 April 2010 agree with expert

Sandeep Nair

Sandeep Nair (Querist)
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01 April 2010 Dear Experts,
Thanx A Lot for your replies.

Regards
Sandeep Nair

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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01 April 2010 agreed

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