m.s. chouhan (owner) 24 July 2022

Leave encashment

i had resign the a private company in (ie 20th june 2020) financial year 2020-21 and get the gratuity and leave encashment and taken the exemption of both in ITR filled for the concerned year as per IT law.

But in the next year (i.e november 2021) in again join the same company and getting salary, so i want to know is there may any problem in income tax while filling the ITR of fy 2021-22 regarding the exemption taken of leave encashment in last year.

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Quick Summary

This discussion addresses concerns about income tax implications of leave encashment exemption when rejoining a former employer within the same financial year. The user received gratuity and leave encashment in FY 2020-21 and claimed exemption, then rejoined the company in November 2021. The consensus is that if the rejoining is treated as a fresh appointment, there should be no issues with the ITR for FY 2021-22 regarding the previous exemption. Seeking advice from a chartered accountant is recommended for personalised guidance.