Showing posts from May, 2023

Exemption for leave encashment increased to Rs. 25 lakhs

CBDT vide notification No 31/2023 dated 24/05/2023 have increased threshold exemption limit prescribed under clause II of section 10 (10AA).  The tax exemption on leave encashment of non-government salaried employees (in respect of the period of earned leave at his credit at the time of his retirement, whether on superannuation or otherwise) was earlier upto a limit of Rs.3 lakh only under section 10(10AA)(ii) of the Income-tax Act,1961(the Act). Now the limit has been increased to Rs. 25 lakhs.  This change is applicable w.e.f. 01/04/2023. Now non-government employees can claim leave encashment exemption up to Rs 25 lakhs subject to fulfilment of conditions under section 10(10AA) of the Income tax act 1961. The aggregate amount exempt from income-tax under section 10(10AA)(ii) of the Act shall not exceed the limit of Rs. 25 lakh  where any such payments are received by a non-government employee from more than one employer in the same previous year. Further, the amount exempt from inc