Leave encashment exemption limit for lic employee

The exemption limit for leave encashment under Section 10(10AA) of the Income Tax Act is now ₹25,00,000 at retirement for non-government employees.

Amounts exceeding this cap are taxable as salary income in the year of retirement.

The ₹3 lakh limit was applicable prior to April 2023 and only applies to employees who retired before April 1, 2023. (AY 2023-24)