Tax exemption on leave encashment during retirement

This query is : Resolved 

11 February 2019

Dear Sir,

I am an employee of a Public Sector Company. At retirement I have 70 Earn Leaves (EL) only. My company gave 32 Earn Leaves per year during my service period of 35 years as per my Earn Leave entitlement per year. Please tell me whether I shall get any tax exemption on leave encashment from the encashment of 70 leaves during the retirement time. If yes/no, please tell me in details.

Tapan Das

kavksatyanarayana (Expert)
11 February 2019

Consult local CA or query in CAclubindia.

Adv Shailendra Deshpande (Expert)
12 February 2019

Leave encashment is treated as Income under IT Tax and tax is applied on the same.

Dr J C Vashista (Expert)
12 February 2019

Terminal/ Retirement benefits are exempted from income tax for central government employees, recheck whether your PSU is covered or not.

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