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leave encashment

Yogananda Appu (17 Points)

03 January 2018

What is the salary to be considered for payment of encashed leaves.

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Rishi Mehta (Ur friend ) (1533 Points)
Replied 03 January 2018

Salary = basic + dearness allowance to the extent of forming part of retirement benefit.

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Yogananda Appu (17 Points)
Replied 03 January 2018

Thanks a lot sir.I wanted to know whether it is as per Income tax act or shop and establishments act.

Rishi Mehta (Ur friend ) (1533 Points)
Replied 03 January 2018

As income Tax Act, 1961

Rishi Mehta (Ur friend ) (1533 Points)
Replied 03 January 2018

As per Income Tax Act,1961

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Yogananda Appu (17 Points)
Replied 03 January 2018

Thank you sir.

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Rishi Mehta (Ur friend ) (1533 Points)
Replied 03 January 2018

Salary for the purpose of leave encashment exemption under Section 10(10AA) will be as under:
Salary for this purpose means basic salary and dearness allowance, if provided in the terms of employment for retirement benefits and commission which is expressed as a fixed percentage of turnover.

Yogananda Appu (17 Points)
Replied 03 January 2018

Noted sir.Thanks once again for your kind gesture.

Rishi Mehta (Ur friend ) (1533 Points)
Replied 03 January 2018

Also add commission which is expressed as a fixed percentage of turnover.

Yogananda Appu (17 Points)
Replied 03 January 2018

Thanks sir.But as per our company policy employees can encash up to 5 leaves which is left in their account.And to say with an example.Im having 12 privileged leave and 4 CL which is not utilized.And they will encash only 5 days leave.And the rest is lapsed as per company policy.