Dear All,
This is a query regarding leave encashment taxation. .
I'm a private company employee. A year back, due to job loss, I got my leaves encashed as a part of final settlement. This was my second job.
I want to understand the tax treatment on leave encashment amount. Is it tax exempt upto 3 lacs for every job change, OR, is this 3 lacs limit the absolute sum of leave encashment money across all the job changes in a lifetime, which is exempt from tax in India ?
Also, how is severance pay taxed ? I got few months of pay as severance pay in addition to the pay in lieu of notice period. I was asked to resign and on the experience certificate, it is clearly written that I resigned on my own accord.
Please suggest.
CAclubindia
