| Question And Answer | |
|---|---|
| Subject: | Leave encashment exemption 25 lakh |
| Category: | Income-Tax |
| Querist: | Manjit singh |
| Answered by: | Law Intern |
| Tags: | LEAVE ENCASHMENT EXEMPTION |
| Date: | June 4, 2026 |
Leave encashment limit raised to 25 lakh for others on retirement wef 1.4.23. It is not date of retirement, it part amount recd in 2022 got exemption 3 lakh.now part amount recd in 2025 can avail remaining exemption limit?
In my view, you can avail the remaining exemption limit (up to the balance of ₹25 lakh) for the part amount received in 2025.
The exemption limit for leave encashment on retirement or otherwise which was increased from ₹3 lakh to ₹25 lakh via CBDT Notification No. 31/2023, effective from 1 April 2023 (FY 2023-24 onwards) is a lifetime aggregate limit across all employers and all years (not per retirement or per year).
So, for the 2025 receipt (post 1.4.2023), you can claim exemption up to the remaining ₹22 lakh balance.
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