Leave encashment at the time of retirement

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Querist : Anonymous

Querist : Anonymous (Querist)

27 February 2013 how do the calculation of cash equivalent formula in days or in month pleas give the answer

Santosh Mishra

Santosh Mishra (Expert)
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28 February 2013 For Leave encashment, least of following is exempted from tax:
1. Earned leave months x Average salary( Basic)( sec 10( 10AA))
2. Avg. monthly salary x 10
3. Maximum amount 3, 00,000
4. Actual amount received

Earned leave months would be (number of year of service*30) minus leave availed by you during your service.

Average monthly salary here means salary drawn by you in last 10 months immediately preceding the retirement.