This is regarding AY 2020-21 (FY 2019-20). The assessee is government employee and the leave encashment received at the time of retirement was claimed fully exempt under section 10(AA) while filing return of income. The assessment order notice generated during November 2021 which has not granted the exemption fully. Only Rs.3 lakh has been considered as exempt leave encashment and remaining leave encashment considered taxable. Thus demand has been raised.
Rectification with option “Reprocess return” did not make any change and same demand is generated in rectification order. The option “return data correction offline” is not getting submitted successfully due to some issue in the portal.
Kindly advise further course of action to be initiated.
CAclubindia
