Leave encashment deduction - which section to claim?

Leave Encashments are exempt under section 10AA if certain conditions are met like duration of service, average salary etc.

Originally posted by : Uttam
	Leave Encashments are exempt under section 10AA if certain conditions are met like duration of service, average salary etc.

Hi Uttam,

Thx for responding. Request you to please provide specific ans to the queries raised above by me.

If section 10AA is the correct one for leave encashment, then what is Section 89 used for? In some online posts, it has been suggested to use Section 89 for leave encashment.

And can I claim this myself, even though my ex-employer has not shown it as tax deductible in Form 16?

Section 10(10AA) is for claiming exemption of leave salary subject to fulfilment of certain conditions specified. Section 89 pertains to relief in respect of arrears/advance received. If such leave salary is received as arrears then u can claim relief u/s 89. I think u can claim exemption while filing ITR if u compute the exemption as per method specified and also if u could retain relevant documents in support of its computation (for furnishing to the AO if required).

Yes, leave salary is non taxable only at retirement or superannuation. It is taxable on resignation.

Thanks,