At the time of an employee leaving a private sector firm (whether resigned or under retrenchment , Please clarify whether the LEAVE ENCASHMENT given to him is taxable or else. if yes, then up to what limit .
i was reading, and came to know that upto 3Lacs INR , this can be claimed as NON TAXABLE during your complete service tenure. Exemption limit of R3 lakh as provided under the IT Act is the maximum that a taxpayer can claim in a lifetime. For example, where an employee has claimed a tax exemption of R75,000 during a financial year on receipt of leave encashment from his employer, a maximum exemption of R2,25,000 can only be claimed in the future years.
hence the employer must not deduct tax while FULL AND FINAL SETTLEMENT. Please clarify..
CAclubindia
