Income tax on leave encashment

TDS 198 views 2 replies

AMIT KAUSHIK

Employee

52 Points Joined May 2008

A Company is under insolvency process. During this management asked to their employees to submit leave encashement request (as management requested, employees taken their leave encashments).

Due to this their income tax slab are changed and their tax deducted as per the applicable rates.

Is any possibilities in this case to get tax exemptions ?

Replies (2)

Aashok Kumar Sharma

Manager - Finance and Accounts

58708 Points Joined June 2010

Leave Encashment is Taxable as Salary Income and an exemption is provided upto Rs. 3,00,000/- based on the computation provided under Section 10(10AA)(ii)

I have a query on leave encashment
our employees have donated earned leave to PM/CM relief fund. The employer became facilitator to convert the Earned leave of employees to money and deposited in the respective account of relief funds of PM / CM.
My question is, whether the perquisites tax on EL encashment need to be calculated even if the employee had directly donated to the relief fund through employer, as a facilitator.