I wish to know whether leave encashment amount received on super annuation is fully taxable or exempted? If taxable what is the limit of ceiling for deductable?
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Leave encashment on super annuation
Replies (2)
Exempt amount shall be least of the following:
Leave encashment actually received
10 months “average salary”
Cash equivalent of unavailed leave calculated on the basis of maximum 30 days leave for every year of completed service.
Amount specified by the Govt i.e. Rs. 3,00,000
Please note the following points:
Salary for the purpose of above computation means “Basic + Dearness Allowance”. It also includes commission based on fixed percentage of turnover achieved by the employee. However, any other allowance received is not to be included in the computation of Salary.
Average Salary is to be computed on the basis of the average salary drawn by the employee during the period of 10 months immediately preceding his retirement.
IN CASE OF GOVT. EMPLOYEE, FULL AMOUNT SHALL BE EXEMPT.
Leave encashment actually received
10 months “average salary”
Cash equivalent of unavailed leave calculated on the basis of maximum 30 days leave for every year of completed service.
Amount specified by the Govt i.e. Rs. 3,00,000
Please note the following points:
Salary for the purpose of above computation means “Basic + Dearness Allowance”. It also includes commission based on fixed percentage of turnover achieved by the employee. However, any other allowance received is not to be included in the computation of Salary.
Average Salary is to be computed on the basis of the average salary drawn by the employee during the period of 10 months immediately preceding his retirement.
IN CASE OF GOVT. EMPLOYEE, FULL AMOUNT SHALL BE EXEMPT.
thank u for ur kind response.
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