| Question And Answer | |
|---|---|
| Subject: | Retirement Encashment received in FY 2023 – 24 |
| Category: | Income-Tax |
| Querist: | Pranab Kumar Gupta |
| Answered by: | Law Intern |
| Tags: | LEAVE ENCASHMENT EXEMPTION |
| Date: | February 8, 2026 |
I had received my retirement L.Encashment in May 2022 and a tax deduction was made after a basic exemption of Rs.3 lakh. I came to know that the limit of Rs. 25 lakh is applicable to my case also. I worked in PSU .
How should I proceed to get back the excess tax deducted earlier.
Do I need to apply for condonation or a simple revised return to be uploaded.
The law on whether you are entitled to the higher exemption as per CBDT Notification No. 31/2023 dated May 24, 2023 is not clear.
Although the notification is effective from April 1, 2023 (FY 2023-24/AY 2024-25), several ITAT Benches have ruled in favor of retrospective application to earlier years, treating it as a beneficial and remedial provision.
However, Dept is in appeal to the High Court against these rulings.
You are not eligible to file an updated ITR u/s 139(8A) as you are seeking a refund. The only solution is to file a rectification application u/s 154. If the AO rejects the claim, you may file an appeal to the CIT(A). Hopefully, the CIT(A) will follow the ITAT’s rulings and give relief.