income tax on leave encashment at the time of retirement

arunkl 1
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I am a CPSU ( BHEL ) employee. Is the leave encashment for CPSU employee tax free OR I have to pay the tax on it??

tax-deduction leave-encashment income-tax
1 Answers

In your case, the exemption is to be limited to minimum of all below:

  1. The actual amount received
  2. The cash equivalent of leave balance (max 30 days per year of service)
  3. Maximum of 10 months of leave encashment, based on last 10 months average salary
  4. Rs. 3 Lakhs
Pankaj Batra5212
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