<h1>Tax Exemption for Leave Encashment Raised to Rs. 25 Lakh for Non-Government Employees u/s 10(10AA)(ii.</h1> The Central Government has increased the tax exemption limit for leave encashment for non-government salaried employees from Rs. 3 lakh to Rs. 25 lakh, effective from April 1, 2023. This change applies to leave encashment received upon retirement or otherwise. The exemption under section 10(10AA)(ii) of the Income-tax Act, 1961, is capped at Rs. 25 lakh, even if payments are received from multiple employers in the same year. Additionally, the exemption amount is reduced by any prior exemptions claimed under the same section in previous years. Notification No.31/2023 was published on May 24, 2023.