Leave Encashment Govt increases the limit for tax exemption on leave encashment for non-government salaried employees
New Delhi/IBNS: The government has increased the tax exemption limit on leave encashment of non-government salaried employees from Rs 3 lakh to Rs 25 lakh.
Leave encashment applies to the period of earned leave at an employee’s credit at the time of retirement, whether on superannuation or otherwise.
The new tax exemption limit has been announced in line with Finance Minister Nirmala Sitharaman’s Feb 2023 Budget speech.
The new exemption limit will be effective from April 1, 2023.
“The aggregate amount exempt from income tax under section 10(10AA)(ii) of the Act shall not exceed the limit of Rs. 25 lakh where any such payments are received by a non-government employee from more than one employer in the same previous year,” the Union Finance Ministry said in a statement.
“Further, the amount exempt from income tax under section 10(10AA)(ii) of the Act shall not exceed the limit of Rs 25 lakh as reduced by the tax exemption already allowed in the total income of the employee under section 10(10AA)(ii) of any previous year or years,” read the statement.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
