Income tax on leave encashment
Govinda Raju
(Querist) 09 March 2018
This query is : Resolved
I am a retired person from Karnataka power transmission corporation limited which is Govt of Karnataka undertaking. At the time of retirement I got leave encashment of about Rs 15 Lakhs. I retired in Feb2014. At the time of retirement no income tax was deducted as the organisation was Karnataka Electricity Board earlier. After unbundling different companies were formed and KPTCL is one copany.
Now income tax authoroties have issued notice to KPTCL that its employees has to pay income tax on leave encashment above Rs 3 lakhs , KPTCL has started recovering tax from pension of the employees.
It is stated that the Government employees are fully exempted from paying tax on leave encashment as per income tax rules and other employees have to pay tax on leave encashment above Rs 3 lakhs.
Is it not discrimination between employees.
Can this rule can be challenged.
P. Venu
(Expert) 10 March 2018
Has the formation of the company changed your status as Public servant?
Dr J C Vashista
(Expert) 11 March 2018
Post this query on CA Club or seek opinion of tax conusltants.
However, retirement benefits are exempted from Income Tax.
