| Question And Answer | |
|---|---|
| Subject: | Exemption of tax on leave encashment |
| Category: | Income-Tax |
| Querist: | gulshan kumar arora |
| Answered by: | Law Intern |
| Tags: | LEAVE ENCASHMENT EXEMPTION |
| Date: | January 26, 2026 |
I RETIRED ON JULY 2015 AND RECEIVED LEAVE ENCASHMENT OF RS 638000/- PLUS AND GOT EXEMPTION OF TAX ON RS 300000/- AND PAID TAX ON BALANCE. AS PER CBDT NOTIFICATION THE LIMIT ENHANCED TO RS. 25 LAC HENCE NEEDS TO BE REVISED AND REFUND. PLEASE LET ME KNOW WHETHER I AM ELIGIBLE TO CLAIM IF NOT PLEASE PROVIDE THE DOCUMENTARY REASONS. AS MANY OF THE ITAT CASES DECIDED IN FAVOUR OF THE PENSIONERS.
REGARDS
GULSHAN ARORA
CONTACT 9811922049
MAIL gularora123@gmail.com
It is true that the ITAT has ruled that the Rs 25 lakh exemption has to be applied retrospectively for assessment years prior to FY 2023-24 on the logic that the limit increase accounts for inflation and salary growth and is a beneficial provision.
However, the counter argument is that as the notification itself explicitly states it is effective from April 1, 2023 and not retrospective, Courts cannot mandate retrospective revision.
Anyway, subject to a final decision in the matter by the higher courts or a legislative amendment, you can keep the issue alive by filing a petition u/s 264 and asking for the relief to be given on the basis of the ITAT judgements.