Hello,
I want to know that govt employees get their leave encashment amount using their last salary, and this encashment is fully exempt from income tax. But non-govt employees get the amount using their average salary of last ten months.
Other things like a maximum of 300 leave days are the same then, what is the reason for the above difference?
Thanks
The cap of not more than 3 lakhs exemption...
Sir, I asked about the difference between 'last salary' vs 'average salary'.
And that one also (3 lac). This limit is not for Govt. employees.
Yes, the cap and the average of 10 months etc. all these are for non governmental employees.
For Govt. employees the LTA at the time of retirement is totally exempt, u/s. 10(10AA)(i) of IT act.
CAclubindia
