leave encashment after the retirement
prashant desai (190 Points)
03 July 2018is this taxable ?
if not the which section it is exempt?
prashant desai (190 Points)
03 July 2018
Sarath Rajendran
(Nil)
(2791 Points)
Replied 03 July 2018
No tax exemption is available for earned leave encashed during the service period.
The amount of earned leave you encash will be taxable as salary income in your hands. encashment of earned leave at the time of retirement is exempt from tax, subject to certain conditions and up to a maximum amount of Rs 3 lakh. The total amount of earned leave will be calculated as 30 days leave for every one year of completed service. The average salary for the past 10 months is taken into account for calculating the encashment amount. At the time of retirement, the amount of leave encashed during the service period will be reduced from the total amount calculated.
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