exemption of leave encashment
Mahesh Chandra Mohapatra (189 Points)
05 August 2019
Is leave encashment on retirement fully exempted in case of non govt employee
Mahesh Chandra Mohapatra (189 Points)
05 August 2019
Deepak Gupta
(CA Student)
(15922 Points)
Replied 05 August 2019
Encashment of unutilized earned leave at the time of retirement of other employees (not being a Government employee):
Least of the following shall be exempt from tax:
a) Amount actually received
b) Unutilized earned leave* X Average monthly salary
c) 10 months Average Salary**
d) Rs. 3,00,000
* While computing unutilized earned leave, earned leave entitlements cannot exceed 30 days for each completed year of service rendered to the current employer
** Average salary = Average Salary*** of last 10 months immediately preceding the retirement
***Salary = Basic Pay + DA (to the extent it forms part of retirement benefits)+ turnover based commission
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