Leave encashment - govt. employee

This query is : Resolved

Atul M (Querist)
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31 July 2014 Good Evening Sir, My query is related to Leave encashment related to Govt. Employee. Sir, My dad was retired 3 years before? He is a senior citizen. Now F.Y 2013-14 he received Leave encashment with Pension. So BMC has deducted Tds of Rs. 10,750/- . So i want to know that Leave encashment would be exempted as well as pension income? Sir, its my humble request for above query? kindly solve it.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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31 July 2014 Any amount Received as Leave encashment after retirement by a government employee* is exempted to the extent as mentioned in section 10(10AA) of IT Act,1961.
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Here Government Employee means and includes ____(i) Central Government Employees
____(ii) State Government Employees

Hence Amount Received from BMC being a Local Authority is not eligible for exemption and hence taxable.

(**Source : V K Singhaniya )