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leave encashment

15 August 2019

sir
I retired on March 2019 from Punjab national bank. sir let me know whether my leave encashment taxable or not

Regards
NARENDER GUPTA
JAGADHRI
YAMUNA NAGAR
MAIL ID narendergupta346 @ gmail.com

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160609 Points)
Replied 15 August 2019

Section 10(10AA)(i)- LEAVE ENCASHMENT EXEMPTION

As per this section, the least of the following is exempt from tax:

INR 300,000; or
Actual leave encashment amount received; or
10 months’ average salary; or
Cash equivalent of leaves that are lying credit to an employer’s credit, at the time of retirement.

Kapadia Pravin (17249 Points)
Replied 15 August 2019

Follow Form 16 alongwith annexure and check 26AS

Narender Gupta (17 Points)
Replied 16 August 2019

Sir bankers leave encashment is taxable or not

pd23071997 (None) (388 Points)
Replied 16 August 2019

Yes, taxable.

Narender Gupta (17 Points)
Replied 16 August 2019

Sir
bankers leave encashment at time of retirement is taxable or not

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 23 August 2020

Leave encashment is fully exempt only for employees of Central and State Government (If received after retirement or superannuation). For the purpose of income tax, PSU/nationalized bank is not considered as government employer. Accordingly, retired employees of public sector undertakings and nationalised banks cannot be treated as government employees. They are not entitled to get full tax exemption on leave encashment after retirement or superannuation under section 10(10AA). Exemption available to them up to limit and as per criteria prescribed for non-government employee.