Tax deducted on leave encashment post resignation

Hi,

In Nov 2010, I resigned from a private sector company after serving for 3.5 years and joined another one . My leave encashment amount was 67677 but the previous employer added it to the 'Gross Income' but did not provide me 'Leave Encashment Exemption' and hence I paid income tax on it. These figures are mentioned in the Full and Final Settlement Letter but are not mentioned on the Form 16 I received recently.

My question: Can I claim the income tax exemption on leave encashment while filing the IT returns now ? If yes, can I deduct the leave encashment amount from my 'Gross Income' and recalculate my tax liability ? Please provide useful details.

Thank you very much for your time and awaiting your valuable responses.

Gaurav

Replies (2)

As per section 10(10AA) of income tax in india, leave encashment amount received by employee by a previous employer in full and final statement, is non-taxable. So If you have changed a job in financial year and received leave encashment for the remaining earned leaves (ELs) Just deduct the amount from total income and compute the income tax on top of that.



 

Sir,

Leave encashment after retirement received by employee of centre & state govt. is exempt.

but private sector employee have certain limits for exemption

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