TAXABILITY OF LEAVE ENCASHMENT RECEIVED DURING SERVICE

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ramesh (Querist)
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14 July 2024 I AM A CENTRAL GOVT EMPLOYEE AND RECEIVED LEAVE ENCASHMENT WHILE IN SERVICE. MY OFFICE DEDUCTED 30% INCOME TAX ON THE AMOUNT PAID TO ME AS LEAVE ENCASHMENT. CAN I CLAIM DEDUCTION UNDER SEC. 89 FOR THE INCOME TAX DEDUCTED. KINDLY CLARIFY.

URGENT CLARIFICATION PLEASE

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 July 2024 Yes, you can get rebate u/s. 89(1) IT act by filing form 10 E before filing relevant return.

ramesh

ramesh (Querist)
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15 July 2024 pl inform under which heading i should apply for rebate under Sec. 89 (1) - is it under Salary arrears received? Annexure I. pl reply

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 July 2024 Yes, it is taxable under head Salary.

ramesh

ramesh (Querist)
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15 July 2024 PL ALSO INFORM HOW TO SHOW THE LEAVE ENCASHMENT RECEIVED IN FORM 10 E

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 July 2024 Refer: 2. Annexure I (Arrears) - Salary / Family Pension received in arrears in the link.....
https://www.incometax.gov.in/iec/foportal/help/statutory-forms/popular-form/form10e-um

For tax calculator on arrears ....
Refer:: https://cleartaxindia.com/how-to-file-10e-in-the-new-income-tax-portal-with-auto-calculate-income-tax-arrears-relief-calculator-u-s-891-with-form-10e-from-the-f-y-2000-01-to-f-y-2023-24/

ramesh

ramesh (Querist)
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17 July 2024 SIR, PL HELP WHETHER MY CALCULATION IS CORRECT WITH REGARD TO LEAVE ENCASHMENT DEDUCTION UNDER SEC89 of income tax act
SALARY RECD AY 2024-25 Rs.18,54,432
LEAVE SALARY RECD Rs. 40,281
TOTAL SALARY Rs.18,94,713
TAX PAID Rs.2,79,150 (INCLUDING Rs..12,567 as tax on leave encashment)

salary recd previous year (ay 2022-23) Rs.17,39,478

As per 10E calculation in income tax website, it shows no relief under Sec. 89.

Pl help

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 July 2024 Yes, the tax rate (Slab) being same in both the years, there won't be any change in tax over leave encashment amount, so better pay it in current year itself. No need to file Form 10E

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ramesh

ramesh (Querist)
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17 July 2024 THANKS FOR YOUR KIND CLARIFICATION. GOT FULLY CLARIFIED. IF POSSIBLE, GIVE ME ONE MORE CLARIFICATION PL.
I HAVE SHORT TERM CAPITAL GAIN OF RS. 30000 THIS YEAR AND ALSO HAVE CARRIED FORWARD LONG TERM CAPITAL LOSS OF RS. 200000/- ON SALE OF HOUSE PROPERTY LAST YEAR. CAN THIS STCG BE ADJUSTABLE AGAINST LONG TERM CAPITAL LOSS. PL INFORM

ramesh

ramesh (Querist)
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17 July 2024 SHORT TERM CAPITAL GAIN IS FROM SALE OF EQUITY SHARES

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 July 2024 No. LTCG can only be adjusted against LTCG. So, if there is any LTCG in this year, it will get adjusted, otherwise it will be carried forward.

ramesh

ramesh (Querist)
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17 July 2024 THANK YOU VERY MUCH SIR.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 July 2024 "Sorry, I am not a featured member."

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 August 2024 You are welcome.