| Question And Answer | |
|---|---|
| Subject: | Leave encashment on retirement |
| Category: | Income-Tax |
| Querist: | Manoj Kumar Agarwal |
| Answered by: | Law Intern |
| Tags: | leave encashment, LEAVE ENCASHMENT EXEMPTION |
| Date: | December 14, 2025 |
I retired from SBI on 30.11.21
Can I claim exemption now upto 2500000 by filing revised ITR
There is a controversy over the taxability of leave encashment. The CBDT Notification No. 31/2023 (dated 24 May 2023) which increased the exemption limit for leave encashment on retirement for non-government employees (including PSU bank employees like SBI) from ₹3 lakh to ₹25 lakh, is effective from 1 April 2023 (AY 2024-25 onwards). Though, it is prospective, several recent ITAT benches have treated it as beneficial/clarificatory and applied it retrospectively to earlier years.
In your case, the deadline for filing a revised return for FY 2021-22 (AY 22-23) has expired. You can try to file a rectification application and if that is rejected, yu may file an appeal to the CIT(A).