Leave encashment

[Guest]

Leave encashment on retirement is fully exempt under section10(10aa) of the Income Tax Act for central and state govt. employees. Can the employees from Fully state aided educational institutions be treated at par with state govt employees as the amount is received directly from state treasury.

[CAGOPALJI AGRAWAL]

No employee would be treated as non govt employee. This view also takes support as employees of local authority or PSU are also not treated as Govt employees for the purpose.

AI Summary

Leave encashment exemption limited to government employees; state aided institution staff not treated as government employees for this purpose. Leave encashment on retirement is exempt for central and state government employees; employees of fully state aided educational institutions are not treated as government employees for that exemption even if payments are made from the state treasury, and similarly local authority and public sector undertaking employees are excluded from classification as government employees for this tax purpose.