Leave Encashment at the Time of Retirement of an employee of a Co Operative Bank

This discussion clarifies the tax exemption for leave encashment upon retirement for employees of Primary Agricultural Credit Societies (PACS) in Kerala. While these employees follow Kerala Service Rules, they are not considered government employees. Therefore, the exemption limit for leave encashment is Rs. 3 lakhs, as applicable to non-government employees under Section 10(10AA)(ii) of the Income Tax Act.