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Claiming section 89 benefit for leave encashment during service
I wish to claim relief u/s 89 for leave encashment during service. Due to inclusion of lumpsum amount in my income for FY 2016-17, I fall in 30 % bracket while I paid tax @ 20 % in earlier years. How can I bifurcate the lumpsum amount to earlier years ? Is there any thumb rule like 1/3 in previous 3 years etc. ? Kindly guide.
Replies (2)
Generally divided as per the number of leaves earned in each year.
Hi Dilip, Thanks for your query. One thing I understand from your query is that claiming relief is only helpful when the tax slab for the year of Earning the leaves is lower than slabs of year in which encashment is credited. This helped.
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