income tax on leave encashment at the time of retirement

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

asked Sep 10 '12 at 16:03 by arunkl 1111

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

answered Sep 12 '12 at 11:53 by Pankaj Batra 5.2k320


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Asked: Sep 10 '12 at 16:03

Seen: 3,451 times

Last updated: Sep 12 '12 at 11:53