18 August 2010
For Govt employee: Leave encashment during continuity of employment : It is chargeable to tax. However, relief can be taken under section 89
Leave encashment at the time of retirement/ Leaving job : It is fully exempt from tax under section 10(10AA)(i)
For Non Government employee:
Leave encashment during continuity of employment : It is chargeable to tax. However, relief can be taken under section 89 Leave encashment at the time of retirement/ Leaving job : It is fully or partly exempt from tax in some cases under section 10(10AA)(ii)
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