Leave Encashment Calculator
Compute leave encashment value with tax exemption indication.
Compute leave encashment payable on retirement / resignation. Different tax treatment for government vs non-government employees under Section 10(10AA) of the Income Tax Act.
Leave Encashment
Per-day wages₹ 0
Total encashment amount₹ 0
Tax exempt amount₹ 0
Taxable as salary₹ 0
Per-day wages = (Average monthly salary × 12) / 360 (or similar formula for private). Average is of last 10 months immediately preceding retirement.
Tax treatment under Section 10(10AA):
- Government employees: Entire amount fully exempt from tax.
- Non-government employees at retirement / resignation: Exempt to the extent of LEAST of (i) actual amount received, (ii) Rs 25,00,000 (statutory cap revised May 2023), (iii) 10 months' average salary, (iv) salary corresponding to leave at credit (max 30 days per year of service).
- On death: Entire amount exempt to legal heirs.
- During service: Entire amount is taxable as salary.
- Statutory cap: Rs 25,00,000 (raised from Rs 3,00,000 in May 2023) for non-government employees.
- Days at credit: Maximum 30 days per completed year of service can be encashed (i.e., 30 × years).
Important note: This tool provides an indicative output only. It does not factor in every special provision, surcharge, exception, or recent notification. Verify with the firm before acting on any computation.
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