Leave Encashment exemption in Income Tax Budget 2023

Leave Encashment exemption in Income Tax Budget 2023

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Leave Encashment exemption in Income Tax budget-2023 If you are a non-government salaried employee who has recently retired or is planning to retire

Leave Encashment exemption in Income Tax Budget 2023

If you are a non-government salaried employee who has recently retired or is planning to retire soon, you may be interested to take tax exemption on leave encashment. This tax Exemption benefit is available to all non-government salaried employees who have accumulated unused leaves till the time of their retirement. The amount received from leave encashment is treated as a tax-free retirement benefit in India.

The current limit for tax exemption on leave encashment on the retirement of non-government salaried employees is Rs. 3 lakh which was last fixed in 2002 when the highest basic pay in the government was Rs. 30,000 per month. Since then, government salaries have increased significantly, so it is time to review the limit for tax exemption on leave encashment.

To match the increase in government salaries, it is proposed by the finance minister in budget 2023 to increase the tax exemption limit on leave encashment on retirement increased from 3 lacs to Rs. 25 lacs. This means non-government salaried employees who receive leave encashment amount on their retirement will be eligible for tax exemption up to INR 25 lakh. so from the total amount received Rs 25 Lacs will be exempt from Income Tax, and the balance amount will be taxable as per income tax rates applicable.

For availing of the leave encashment exemption, non-government salaried employees must ensure that their employer has calculated the taxes and paid the required taxes.

Due to this exemption, non-government salaried employees will receive a large tax-free amount on their retirement. So before retiring ensure that your employer has duly complied with the provision so you can take the leave encashment exemption.

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Saral Tax India | सरल टैक्स इंडिया: Leave Encashment exemption in Income Tax Budget 2023
Leave Encashment exemption in Income Tax Budget 2023
Leave Encashment exemption in Income Tax budget-2023 If you are a non-government salaried employee who has recently retired or is planning to retire
Saral Tax India | सरल टैक्स इंडिया
https://www.saraltaxindia.com/2023/02/leave-encashment-exemption-in-income-tax.html
https://www.saraltaxindia.com/
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