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Leave encashment

Samir (Accounting and taxation outsou) (414 Points)

23 February 2008

Leave encashment or carry forward of leave which is the better option for compnay and why?

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CA.Mkhandelwal (Practice) (156 Points)
Replied 23 February 2008

Leave encashment is the better options in case of employees who seems to be with the company in the near future also. The reason is that leave encashment is to be paid on latest basic salary and carry forward of leave will either be adjusted against leave taken or encashment in future. In case of adj.of leave taken the salary will be on gross salary and encashment in future will be the latest basic and that time the basic may rise due to increment.