My company (private company) gives leave encashment every year and not when the employee leaves.
I know we need to pay taxation if the amount goes above 25 lakhs but what in case your company pays it yearly? The amount is less than ~50K yearly. What is the taxation rule in this case?
Hey @Jack_R,
The leave encashment amount that you receive during employment is taxable. It is added to your salary income and taxed as per your applicable tax slab.
Only in the case of leave encashment received on retirement/resignation, the amount up to ₹25L is exempted from taxes.
Hope this clarifies!