Leave Encashment

Hi

 

While calculating the taxability of leave encashment of the resigned employee, we need to take into consideration the amount of exemption already claimed under section 10(10AA)(ii) of the Income Tax Act.

 

If the employee has already claimed exemption of some amount of leave encashment under the said section from the other company and the same was not in notice of the new company (reason being unawareness of the resignee or not asking for this information by new company or nything else)  making full and final then what the company should do like it should calculate taxability of leave encashment on the assumption that no exemption has been previouisly claimed by resignee?  In this case wh will be defaulter-company or resignee?

Replies (4)

Replyyyyyyyyyyyyyyyyyy

Yes, You need to rely on the statemnet from employee. Even you can demand for a note certifying by previous company about the leave balance as on the date of regisnatin

Hina It is the responsibility of Employee to submit all the details to company if employee not submit the details then company in the absence of information proceed as per normal provisions of IT act. Finally the employee has to pay tax.

Hinna

I agree with both of above answers.....................As it is the employee responsblity to declare all his previous employer liablaity . And in other side whatever is the case you are just issuing the TDS certifiacte to him , which is totally supported by supporting papers i.e. employee declaration , incomedetails , tax calculation ...........So you need not worry just consider the income or exemption which is declared by employee itself.....................

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