In the recent Union Budget, Rs.25 lakhs was announced as maximum exemption from Income Tax on Leave encashment at the time of retirement for non govt employees. Whether this Enhancement is applicable to both old and new regimes, please?
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Enhanced exemption on Leave Encashment on retirement
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The Annexure issued after the Union Budget announcement states that encashment of earned leave up to 10 months of average salary, at the time of retirement in case of an employee (other than an employee of the Central Government or State Government), is exempt under sub-clause (ii) of clause (10AA) of section 10 of the Income-tax Act (“the Act”) to the extent notified.
The final notification will be issued only after passing of the finance bill.
Plain reading suggests that it will be applicable to both regimes.
Thank you sir for the immediate clarification .
Most welcome.
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