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In the 2023-24 Budget, finance minister Nirmala Sitharaman has increased the tax exemption limit on leave encashment, on the retirement of non-government salaried employees to Rs 25 lakh, from Rs 3 lakh. The latest leave encashment exemption limit is applicable from FY 2023-24 (AY 2024-25).
May 26, 2023 · The CBDT has increased the tax-exemption limit for leave encashment from Rs. 3 lakh to Rs. 25 lakh, effective from April 1, 2023, in line with the rise in government salaries.
Leave encashment received by an employee at the time of retirement (on superannuation or otherwise) is partly exempt from tax under Section 10 (10AA). The maximum amount of leave encashment that is exempt from tax is Rs. 3 Lakh [ Rs. 25 lakh (as per the Budget 2023)]. The exemption is calculated as follows:
May 25, 2023 · Finance Ministry has notified the enhanced limit of earned leave encashment for exemption from Income Tax. This aims to implement the budget proposal.
Apr 4, 2024 · Currently, the overall leave encashment exemption during an employee’s lifetime cannot exceed the total specified limit (presently ₹25 lakh). Understanding the nuances of taxation related to leave encashment ensures employees make informed decisions based on their specific circumstances.
May 25, 2024 · For non-government employees, leave encashment is exempt up to a specified limit. Previously set at Rs. 3 lakh since 2002, this limit has now been increased to Rs. 25 lakh, reflecting the general rise in salary income. What is Leave Encashment? As per labor law, every salaried person is entitled to a minimum number of paid leave days each year.
May 25, 2023 · The tax exemption limit for non-government (private sector) salaried employees on leave encashment has been raised from Rs 3 lakh to Rs 25 lakh, effective April 1, 2023.
Apr 27, 2022 · Leave encashment received at the time of retirement / resignation is fully exempt for Central or State Government employee. Leave encashment received by Non-Government employee is exempt to the ...
Private sector employees can get exemption on leave encashment income under Section 10 (10AA). Exemption under Section 10 (10AA) A part of the leave encashment income at the time of superannuation or resignation is exempt from income tax payment. This exemption is applicable to the lowest of the below amounts: Rs. 3 lakh.
CBDT (Central Board of Direct Taxes) vide its notification S.O. 2276(E) dated the 24th May, 2023 has increased the maximum amount receivable by its employees as cash equivalent of leave salary (leave encashment) in respect of the period of earned leave at their credit at the time of their retirement
