Budget 2023: Finance Minister Nirmala Sitharaman (Nirmala Sitharaman) has given a big relief to the taxpayers. He received Leave Encashment (Leave Encashment) limit has been increased from Rs 3 lakh to Rs 25 lakh. He announced this in the budget speech on 1 February. He said that the last time in the year 2002, the limit of tax exemption on leave encashment was fixed at Rs 3 lakh. This was for non-government salaried employees. At that time the highest basic pay for a government employee was Rs 30,000 per month. He said that in view of the increase in salary, I propose to increase this limit to Rs 25 lakh.
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Employees get some paid leave every year
working person (Salaried Person) gets some paid leave every year. But, it is not necessary that the employee fully utilizes this leave given every year. He gets the facility to carry forward the unused leave. Due to this, he gradually accumulates a large number of such leaves. He uses it at the time of retirement or leaving the job. The company pays him money in lieu of unused paid leave. This concept is called leave encashment.
Currently there was a limit of Rs 3 lakh
Chetan Chandak, director of tax consultancy firm TaxBirbal, said, “Except for central and state government employees, encashment of paid leave up to 10 months’ average salary is exempted from income tax. Currently, the maximum amount for exemption is Rs 3 lakh. This limit is to be increased to Rs 25 lakh in the Union Budget 2023. is proposed.”