| Question And Answer | |
|---|---|
| Subject: | income tax on leave encashment |
| Category: | Income-Tax |
| Querist: | deepak |
| Answered by: | Law Intern |
| Tags: | LEAVE ENCASHMENT EXEMPTION, Section 10(10AA)(ii) |
| Date: | February 8, 2026 |
Sir
I retired in july 2021 and claimed full exemption on leave encashment but now ito has allowed only 3 lac. what can be done.
The ITAT has taken the view that Notification No. 31/2023, increasing the limit u/s 10(10AA)(ii) to ₹25 lakh with effect from April 1, 2023 (i.e., AY 2024-25 and later), should be treated as retrospective and applicable to earlier years.
To benefit from this, you will have to file a rectification application. The AO will probably reject it. You will have to file an appeal against that. The appellate authority may give you relief by following the judicial precedents.
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