Ramakrishnaraju (supervisor) (211 Points)
19 February 2010I read that 89(1) relief can be claimed even for the EL encashment on retirment or otherwise, provided the EL accrued over the years are received now. How the amount will be apportioned as because his/her salary would have been less during that period.
CA.SKR
(CA; CS-Final (One Group); DISA (ICAI); Insolvency Professional)
(442 Points)
Replied 19 February 2010
| Originally posted by : Ramakrishnaraju | ||
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I read that 89(1) relief can be claimed even for the EL encashment on retirment or otherwise, provided the EL accrued over the years are received now. How the amount will be apportioned as because his/her salary would have been less during that period. |
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Leave encashment received at the time of retirement is exempt subject to certain limit.
Ramakrishnaraju
(supervisor)
(211 Points)
Replied 20 February 2010
Yes, the limit is Rs.3,00,000/-. However, when some one is getting Rs.10,00,000/- or more on reiterement for the EL balance on credit and half pay leave on credit, will Rs.7,00,000/- or more will be taxed according to the slab? or 89(1) can be claimed?
Amir
(Learner)
(4016 Points)
Replied 20 February 2010
Dear Ramakrishnaraju,
Relief u/s 89(1) can be claimed on Leave encashment along with the exemption of Rs. 3 Lakhs........
Encashment of leave - Section 89(1) is applicable to amount received by assessee on encashment of accumulated leave - CIT v. S.N. Chadha [2001] 118 Taxman 520/249 ITR 31 (Delhi).
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India
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