Budget 2023: 8 times increase in leave encashment exemption limit; check here

Budget 2023: 8 times increase in leave encashment exemption limit; check here {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}

Leave encashment is the amount of corpus received for the leaves not taken by an employee, and paid as overtime. {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}

Tax liability in the hands of employees is fully taxable during employment, and fully exempt during retirement in the case of government employees. {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}

For non-government employees, the tax liability is least of the actual leave encashment received, 25 lakhs, or ten months’ salary based on the last 10 months’ average salary at the time of retirement. {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}

The 2023 budget has increased the maximum exemption limit from 3 lakhs to 25 lakhs. {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}

Leave encashment policy is only exempted when it is not withdrawn in the middle of an employment period. {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}

It helps in secure financial planning for retirement even if an employee has not invested for the same. {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}

Personal financial planning should be done ahead to ensure security post-retirement. {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}

Click here to know more about leave encashment exemptions. Check here for more budget related stories. {"selector":".custom-animation","duration":"4s","easing":"ease-out","keyframes":[{"transform":"scale(1)"},{"transform":"scale(1.5)"},{"transform":"scale(2)"}]}