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Taxability of Leave Encashment
Dear All,
As you all know the Leave Encahsment in case of Retirement is Exempt from Income Tax and
Leave Encashment, if taken while on job is Taxable
Can you tell me the Taxability of Leave Encashment in the Event of :
1. Resignation
2. Retrenchment
3. Voluntary Retirement Scheme or Compulsory Retirement Scheme
Regards,
Abhijit Pimple
Replies (1)
In case of Non-Government employee, Leave Salary received on Resignation or Retrenchment is taxable. Of course, relief u/s.89 r.w.rule 21A would be admissible. However, Leave Salary received on Voluntary Retirement or Compulsory Retirement is exempt u/s.10 (10AA) (ii) to the extent specified therein. The scope of said section is extended to Leave encashment at the time of retirement whether such retirement is on superannuation or otherwise. The word “otherwise” covers the case of Voluntary Retirement from service as held by
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