Govt increases the limit for tax exemption on leave encashment for non-government salaried employees
New Delhi/IBNS: The government has increased the tax exemption limit on leave encashment of non-government salaried employees from Rs 3 lakh to Rs 25 lakh.
Leave encashment applies to the period of earned leave at an employee’s credit at the time of retirement, whether on superannuation or otherwise.
The new tax exemption limit has been announced in line with Finance Minister Nirmala Sitharaman’s Feb 2023 Budget speech.
The new exemption limit will be effective from April 1, 2023.
“The aggregate amount exempt from income tax under section 10(10AA)(ii) of the Act shall not exceed the limit of Rs. 25 lakh where any such payments are received by a non-government employee from more than one employer in the same previous year,” the Union Finance Ministry said in a statement.
“Further, the amount exempt from income tax under section 10(10AA)(ii) of the Act shall not exceed the limit of Rs 25 lakh as reduced by the tax exemption already allowed in the total income of the employee under section 10(10AA)(ii) of any previous year or years,” read the statement.
IBNS
Senior Staff Reporter at Northeast Herald, covering news from Tripura and Northeast India.
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