A person retired from an Indian PSU bank on 31.03.2015. He received leave encashment on 08.04.2015. Kindly guide whether the above income shall be added to the income for the year 2014-15 or 2015-16 for the purpose of TDS deduction.
From India, Delhi
Acknowledge(0)
Amend(0)
From India, Delhi
Acknowledge(0)Amend(0)
For govt employees, it is fully exempt from tax u/s 10(10AA)(i). Pon
From India, Lucknow
Acknowledge(0)Amend(0)
616From India, Lucknow
Acknowledge(0)Amend(0)
Pon1965,
Only State and Central government employees are entitled for tax exemption for leave encashment on retirement/superannuation.
The definition of “Government Employee” is not specifically given in I T Act-1961. But the Act has incorporated the PSU employees, Government undertaking employee, Local Authorities employees etc in various other Sections / clauses of the Income Tax Act-1961 wherein benefit is meant to be conferred to them. The same is not there in Section 10(10AA).
So PSU bank employee would need to cross check before working out tax.
This is my opinion unless some rule has changed in this context recently.
From India, Pune
Acknowledge(0)Amend(0)
Only State and Central government employees are entitled for tax exemption for leave encashment on retirement/superannuation.
The definition of “Government Employee” is not specifically given in I T Act-1961. But the Act has incorporated the PSU employees, Government undertaking employee, Local Authorities employees etc in various other Sections / clauses of the Income Tax Act-1961 wherein benefit is meant to be conferred to them. The same is not there in Section 10(10AA).
So PSU bank employee would need to cross check before working out tax.
This is my opinion unless some rule has changed in this context recently.
From India, Pune
Acknowledge(0)Amend(0)
Dear NATHRAO,
As already stated by you, the said amount is surely taxable after some partial exemption as provided under the Act.
The main concern here is regarding the assessment year in which this income is to be taxed for the purpose of TDS deduction. Kindly suggest in light of the rule that salary income is taxable on the basis of due or received whichever is earlier.
From India, Delhi
Acknowledge(0)Amend(0)
As already stated by you, the said amount is surely taxable after some partial exemption as provided under the Act.
The main concern here is regarding the assessment year in which this income is to be taxed for the purpose of TDS deduction. Kindly suggest in light of the rule that salary income is taxable on the basis of due or received whichever is earlier.
From India, Delhi
Acknowledge(0)Amend(0)
As far as my opinion goes-the year in which LE was actually receieved F/Y 2015-16 A/Y 2016-17
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
A write-up on the subject is attached for your guidance. Of course, there are other circumstances as discussed under section 10 of the IT Act, under which certain relief will be available provided the separation is due to termination resulting in a scheme approved by the government on account of closure of an establishment. But for the present case, the attachment might help to the extent required. The queriest should also try for relief under section 89(1) if found beneficial, which requires detailed workings to support your IT returns.
Also, you can learn more from this link: [Tax, tax rates, income tax advice, tax advice, tax planning, news, advice, income tax act, finance act, tax deductions, ELSS, ULIP, PPF, life insurance, infrastructure bonds, mediclaim](http://www.moneycontrol.com/tax/salaries/how-muchleave-encashmentretirement-is-exempt_664846.html)
From India, Bangalore
Acknowledge(0)Amend(0)
Also, you can learn more from this link: [Tax, tax rates, income tax advice, tax advice, tax planning, news, advice, income tax act, finance act, tax deductions, ELSS, ULIP, PPF, life insurance, infrastructure bonds, mediclaim](http://www.moneycontrol.com/tax/salaries/how-muchleave-encashmentretirement-is-exempt_664846.html)
From India, Bangalore
Acknowledge(0)Amend(0)
As far as the specific query of the poster goes, LE is being received on retirement. The concerned person is not a government servant, so no tax exemption beyond a limit. The tax will fall due in the year in which he retired, that is F/Y 15-16, and no relief under Sec 89(1) is admissible in this specific case. However, I advise the poster to cross-check all this information with his tax consultant.
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
ONGC officer retired and received leave encashment on retirement. The employer deducted Rs. 3 lakhs u/s 10(10AA)(ii), whereas I feel he is entitled to exemption u/s 10(10AA)(i) like any other Central Government servant as ONGC is owned by the Central Government Ministry of Petroleum and Natural Gases. Am I correct?
From India, Rajahmundry
Acknowledge(0)Amend(0)
From India, Rajahmundry
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.