6 Replies
(Guest)
No tax exemption is available for earned leave encashed during the service period. The amount of earned leave you encash will be taxable as salary income in your hands. The encashment of earned leave at the time of retirement is exempt from tax, subject to certain conditions and up to a maximum amount of Rs 3 lakh
ritika Bansal
(22 Points)
Replied 02 September 2018
but aur there are also some provision that I didn't understand plse explaim more about this topic
(Guest)
At the time of Retirement:
Government Employee:
The entire amount received as leave encashment is tax free.
Non Government Employee:
The leave encashment for private sector employees is stated in Section 10 (10AA) and is minimum of the following 4 factors:
Amount received as leave encashment
Maximum cap as stated by government – Rs 3 Lakhs
Last 10 months average basic salary & dearness allowance before leaving the job
Cash equivalent of the leave balance, subject to maximum of 30 days for each completed year of service
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