Business Standard

Avoid encashing of leave while you are in service: Know the rules

Tax exemption on leave encashment is only available at retirement, resignation or termination

cash, currency, notes, funds, investment, shares, growth, profit, loss, tax, money, income, earnings
Premium

Bindisha Sarang
Union Budget 2023 has proposed to hike the tax exemption limit on leave encashment at the time of retirement for non-government, salaried employees from Rs 3 lakh to Rs 25 lakh.

Archit Gupta, founder and chief executive officer (CEO), Clear, says, “Normally, at the time of retirement or resignation, people get some money for not taking allotted leaves. That is leave encashment. Until March 31, 2023, up to Rs 3 lakh of this amount was tax exempt. From April 1, 2023 the limit will increase to Rs 25 lakh for private-sector employees.”

Leave encashment is fully tax-exempt in the case

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Feb 07 2023 | 8:31 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com