31 March 2010
Hi, Is Leave Encashment taxable while an employee resigns from a company? What is the meaning of "Retirement" with respect of Leave Encashment?
01 April 2010
The employee may retire from the organisation in so many ways. The word retirement is not defined under the Act. The common dictionary meaning is "removal or withdrawal from service, office, or business". Therefore , according to me a resignation is also equivalent to retirement.My view is supported by the decision CIT V Shahney decided by the Hon' Madras High Court-159 ITR 160 and Hon' Bombay High Court in 229 ITR 394.
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