15 August 2016
Mr Mitra, an employee of XYZ Ltd. Retired on 31.11.2016
He received Rs 2,25,000 as leave Salary. Calculate taxable amount of leave encashment :
Salary at the time of retirement : Rs 10,000 p.m.
PERIOD OF SERVICE : 25 YEARS AND 10 MONTHS
LEAVE ENTITLEMENT FOR EVERY COMPLETED YEAR OF SERVICE : 40 DAYS
LEAVE AVAILED WHILE IN SERVICE : 300 DAYS
UNAVAILED LEAVE AT THE TIME OF RETIREMENT : 700 DAYS
AVERAGE SALARY FOR THE LAST 10 MONTHS TILL NOVEMBER : RS 9,000
16 August 2016
10 months salary is Rs.90000/- & actual leave salary is Rs.225000/-.Of the above,minimum i.e.Rs.90000/- is tax-free & balance i.e.Rs.135000/- is taxable leave salary.
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