Leave encashment for Wages

Jaydeep Kurup (Querist) 24 July 2008 This query is : Resolved
Dear Friends,

Please let me know what does wages include for the purpose of the leave encashment.

Thanks & Rgds,
Jaydeep Kurup.

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Guest (Expert) 24 July 2008
Salary + Dearness Allowance + Commission (if any)

the above components will be the wages for calculation of leave encashment.

Jaydeep Kurup (Querist) 24 July 2008
I believe the word salary here refers to basic salary. Pls clarify.

Thanks a lot for the prompt response.

Guest (Expert) 24 July 2008
Exactly it is basic salary.

Jaydeep Kurup (Querist) 24 July 2008
Thankyou so much.

Jaydeep Kurup (Querist) 24 July 2008
Sorry to revert back on the same subject, but the factories Act states that full earnings exlusive of overtime and bonus shall be included. In that case isnt it that HRA and special allowance may also be included.

In case you have any legal provision for your reply, kindly quote the same.

Guest (Expert) 25 July 2008
special allowance cannot by any stretch of imagination be a wage. so that will not be considered.

HRA is an alllowance permitted for deduction under Income Tax Act only. So it has nothing to do with wages.

Encashment of leave will not be for months together. Any way I get the legal provisions for you after this weekend.

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