leave salary

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dipti (Querist)
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23 July 2009 please advise me that if employee left the job & any leave salary paid at the time of full & final payment, can payment of leave salary exampt from tncome tax u/s 10 for non govt employee.

chetan soni

chetan soni (Expert)
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23 July 2009 yes,
Leave encashment recieved at the time of retirement, resignation or termination is exempt in the hands of employee up to Rs. 3L for non govt employees as per sec 10.

check the link
http://www.taxworry.com/2008/07/is-leave-encashment-taxable.html

RD Verma

RD Verma (Expert)
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23 July 2009 As per sec- 10(10AA)
The employer as per his policy, may allow certain days leave to his employee i.e. Leave Encashment :-
During the job taxable
at the time retirement:-
Govt. emp. fully exempt
other emp. :- least of the following will be exempt:-
(a) Actual amt recd
(b) 10 month salary (ave. of 10month)
(c) cash equivalent (for unavailed leave)
(d) maximum amt rs 3,00,000/-
(salary include Basic+DA(forming part of retirement benefit+ commission % of TO)

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