Section 10(10AA)(ii) governs retirement leave encashment received by employees other than Central or State Government employees. Exemption remains subject to the ten-month earned-leave limit, average-salary calculation, thirty-days-per-year leave entitlement restriction, aggregate limits for multiple employers, and adjustment for earlier exempt receipts. Notification No. 31/2023 raises the notified ceiling to Rs. 25,00,000 and states retrospective effect from 1 April 2023 without adverse effect. Tribunal authorities discussed apply the enhanced ceiling to eligible pending claims for earlier assessment years, while maintaining that public sector undertaking and bank employees do not qualify as government employees under Section 10(10AA)(i).
Section 10(10AA)(ii) governs retirement leave encashment received by employees other than Central or State Government employees. Exemption remains subject to the ten-month earned-leave limit, average-salary calculation, thirty-days-per-year leave entitlement restriction, aggregate limits for multiple employers, and adjustment for earlier exempt receipts. Notification No. 31/2023 raises the notified ceiling to Rs. 25,00,000 and states retrospective effect from 1 April 2023 without adverse effect. Tribunal authorities discussed apply the enhanced ceiling to eligible pending claims for earlier assessment years, while maintaining that public sector undertaking and bank employees do not qualify as government employees under Section 10(10AA)(i).
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