Superannuation settlement and Leave encashment

Dear Sir, My husband is a salaried person (40 yrs) and file returns every year using ITR-1 form which includes income from salary and other sources.

He worked as an IT professional in a Private company for nearly 2 years. He resigned the job and joined another firm.

His superannuation settlement was Rs. 1,56,077. Tax deducted for the same was Rs. 28,344. I found that: 1) Initially It was not included in the form 16 from the previous company 2) When consulted a separate form 16 was given for the same 3) When checked, he being in the 30% tax slab - Only roughly 18% of tax was calculated and deducted by the company.

My doubts are:

1) How should I show this amount under Income from salary Rs. 156077 or Rs.94480 working backwards considering 18% (as 30%). 2) What is the amount that I need to show. 3) Should I pay the rest 12% interest for the same. 4) Is there any exemptions for the same?

Please help.

Next doubt:

Will Leave encashed while resigning as final settlement be treated as Income from salary and the entire amount taxed or is there any exemptions for the same?

Waiting for your earliest reply.


asked Aug 14 '15 at 14:35 by Simmy Xavier 111

  1. You should only show 156077 as actual received amount.
  2. Rest income tax should be paid before filing return.
  3. Payment from an Approved Superannuation Fund will be exempt provided the payment is made in the circumstances specified in the section viz. death, retirement and incapacitation u/s 10(13)

Exemption for leave encashment is also available but limited to the least of following:

  1. Cash equivalent of unutilized earned leave (earned leave entitlement can not exceed 30 days for every year of actual service)
  2. 10 months average salary
  3. Leave encashment actually received. This is further subject to a limit of Rs.3,00,000 for retirements after 02.04.1998.

answered Sep 13 '15 at 21:36 by Pankaj Batra 5.2k320


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Asked: Aug 14 '15 at 14:35

Seen: 4,984 times

Last updated: Sep 13 '15 at 21:36