leave encashment calculation???

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lakshay

ipcc

581 Points Joined January 2011

i know what r d limits for leave encashment

Least of following will be exempted.

Leave encashment Actually received.
Last 10 Month average salary .(average salary explained below)
Maximum amount fixed by the Government from time to time (given below)
Cash equivalent of salary in respect of the period of earned leave to the credit of the employee only at the time of retirement whether on superannuation or otherwise calculated maximum by 30 days maximum for every year of actual service rendered to employer from whose he has retired.

pls help me in 4th point?

how to calculate it...kuch samaj ni aya..pls give an ex and explian it in easy language..pls pls

Replies (3)

Guest

suppose employer of Mr.X allows him 2 months of leave for every completed year of his service and X worked for 25 years then he reitred. Now suppose Mr.X had taken only 10 months of leave in his service of 25 yrs. His avg salary is 20,000 (basic +da+comission on turnover)

Thus according to th 4th point calculation will be...( LEAVE ALLOWED - LEAVE TAKEN) * Avg monthly salary. So leave allowed (as in question) will be 2 mnths * 25 yrs= 50 months..but the thing is .. Income tax doesnt permit more than 30 days in a completed year to be allowed as leave by the employer.. so here we will take 30 days (i.e 1mnth) only. So its will be (1 mnth *25 yrs)=25 months as LEAVE ALLOWED.

Leave taken will be 10 mnth (as mentioned in the ques)

Thus the answers will be > ( 25mnths -10 mnths ) * 20,000