SECTION 10 10 A A

This discussion clarifies the tax exemption for leave encashment under Section 10, which has an upper limit of Rs 300,000. The exemption is calculated as the least of three amounts: the actual leave encashment earned, the average salary for 10 months, or the value of leave earned based on 30 days' salary per month. Importantly, there is no relaxation available for exceeding this Rs 3 lakh limit.