Anil sharma (Engineer) 03 October 2013

Income tax

I am going to retire from Govt. PSU ONGC, I want to know that weather fully tax exemption is available on leave encashment after retirement or up to only 3 lacs limit. as i read some where that in Govt service , there is fully exemption and in Pvt. Sector exemption for only 3 lacs.. Kindly clarify me any learned income tax counsillor. thanks.. ANIL SHARMA...

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Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 03 October 2013

Govt Employees (Central Govt and State Govt employees only): Leave encashment of accumulated leave at the time of retirement, whether on superannuation or otherwise, received by a Govt employee, is fully exempt from tax. No tax would be levied on any amount received as leave encashment by govt employees on retirement.
Other Employees: Leave encashment of accumulated leave at the time of retirement whether on superannuation or otherwise received by any other employee (except those covered above) is exempt from tax to a certain limit. In such a case, the least of the following shall be exempted:-
1. Leave encashment actually received
2. 10 months “average salary”
3. Cash equivalent of unavailed leave calculated on the basis of maximum 30 days leave for every year of completed service.
4. Amount specified by the Govt i.e. Rs. 3,00,000

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