What is the meaning of Earned Leave, which is exempt U/s 10 (10 AA) of the I T Act, 1961. Whether payment of Sick Leave, which remained unused at the time of VRS, is exempt U/s 10 (10AA) ? Please provide any case law, if available.
5 Replies
R Parthasarathy
(22 Points)
Replied 10 May 2007
Earned leave means the leave accrued to the employee in proportion of the work done by him. This varies from employer to employer. For example in government sector, the earned leave is 2.5 days for every month worked. This 2.5 days is granted with a view to provide him rest to enable him to recover from the stess and strain endured by him during the course of his work. This can be accumulated and either taken in the subsequent months or encashed as per the rules extant in force.
CA.Saibaburao Nanduri
(Chartered Accountant)
(3847 Points)
Replied 28 August 2007
Earn leave simply means saved 'leave period'.
Sick leave can not be considered for earn leave.
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