23 July 2009
please advise me that if employee left the job & any leave salary paid at the time of full & final payment, can payment of leave salary exampt from tncome tax u/s 10 for non govt employee.
23 July 2009
yes, Leave encashment recieved at the time of retirement, resignation or termination is exempt in the hands of employee up to Rs. 3L for non govt employees as per sec 10.
check the link http://www.taxworry.com/2008/07/is-leave-encashment-taxable.html
23 July 2009
As per sec- 10(10AA) The employer as per his policy, may allow certain days leave to his employee i.e. Leave Encashment :- During the job taxable at the time retirement:- Govt. emp. fully exempt other emp. :- least of the following will be exempt:- (a) Actual amt recd (b) 10 month salary (ave. of 10month) (c) cash equivalent (for unavailed leave) (d) maximum amt rs 3,00,000/- (salary include Basic+DA(forming part of retirement benefit+ commission % of TO)
CAclubindia
