Leave Encashment Calculator – Section 10(10AA)
The Leave Encashment Calculator helps salaried employees calculate the tax-exempt portion of leave salary received at retirement or resignation under Section 10(10AA) of the Income Tax Act.
Who Can Claim Leave Encashment Exemption?
- Government employees – Fully exempt
- Non-government employees – Partial exemption
Exemption Rules for Non-Government Employees
The exemption is the least of the following:
- Actual leave encashment received
- 10 months average salary
- Cash equivalent of leave (max 30 days per year of service)
- ₹25,00,000 (lifetime limit)
How It Is Calculated
Average Daily Salary = (Annual Basic + DA) ÷ 12 ÷ 30
Leave Encashment Value = Average Daily Salary × Eligible Leave Days
Important Notes
- Leave encashment during service is fully taxable
- Exemption applies only at retirement/resignation
- Lifetime exemption cap is ₹25 lakh
Disclaimer
This calculator provides estimation based on Income Tax provisions. Consult tax advisor for final filing.