| Question And Answer | |
|---|---|
| Subject: | LEAVE ENCASHMENT EXEMPTION APPLICABILITY LIMIT OF RS 2500000 IS APPLICABLE IN ALL THE CASES |
| Category: | Income-Tax |
| Querist: | Y S MAHAPATRA |
| Answered by: | Research Team |
| Tags: | leave encashment, LEAVE ENCASHMENT EXEMPTION, leave salary |
| Date: | June 30, 2023 |
Leave encashment benefits received by the salaried class at retirement, whose limit has been hiked from ₹3 lakh to ₹25 lakh in the Budget, will be tax-free in their hands under the new income tax regime even if they switch to it in the year of retirement, Revenue Secretary Sanjay Malhotra told. IS THIS FACILITIES ARE AVAILABLE ON ACCURAL BASIS OR PAYMENT BASIS, SUPPOSE A PERSON HAS BEEN RETAIRED FROM PSU SERVICE ON 31.10.2022 BUT HIS FINAL SETTLEMENT IS NOT YET DONE TILL TO DAY i.e. GRATUITY , LEAVE ENCASHMENT IS NOT YET PAID, MY QUESTION IS CAN HE AVAIL THE BENEFIT OF TAX EXEMPTION LIMIT RS.25,00,000 ON LEAVE ENCASHMENT ? THOUGH HE HAS RETAIRED FROM SERVICES ON 31.10.2022
REGARDS
Y.S.MAHAPATRA
8896600712
E MAIL ysmahapatra@yahoo.com
Leave encashment is taxed in the year it is received by an employee. As the querist has not yet received the leave encashment, he will be eligible to avail the benefit of the new limit of Rs 25,00,000/- for taxation purposes. However, it is pertinent to note that leave encashment received by a government employee is fully exempt from income tax, regardless of the amount.