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Can Leave encashment be on basis salary and notice recovery on gross salary

Sandeep Bagga (HR Manager) (77 Points)

09 June 2021

Our company is recovering notice period on gross salary and paying leave encashment on basic salary. Is it possible to have different basis for notice period and leave encashment ?

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5 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 10 June 2021

Leave encashment should be based on basic salary and DA

CMA Poornima Madhava (CMA) (13097 Points)
Replied 10 June 2021

Corporates usually have internal policies which are more beneficial to them.

Leave salary for the purpose of exemption (or otherwise) under income tax act is calculated on basic + DA.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 10 June 2021

Gross salary is not deducted. So it is not used. Does your company give profit bonus for high employee turnover? No one paid me profit of 3% for turning out everyday as well.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 10 June 2021

Ok now I understand why my colleagues used to work recklessly so that one’s mind and body will attenuate ebullience and fall I’ll and take leave. That is why there is chaos n the floors and it is encouraged as well.