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?
ramdoss m (122 Points)
07 February 2023In 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?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(161766 Points)
Replied 07 February 2023
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.
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