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Income TaxIndividual
Leave Encashment — Tax Exemption Calculator
Exemption u/s 10(10AA) on leave encashed at retirement. Govt employees: fully exempt. Private sector: least of four limits, capped at ₹25 lakh.
Your inputs
₹80,000
₹
Average of Basic + DA (forming part of retirement benefits) for the 10 months immediately preceding retirement.
Capped at 30 days per completed year of service.
₹8,00,000
₹
Result
- Exempt u/s 10(10AA)
- ₹6,40,000
- Taxable (added to salary)
- ₹1,60,000
- Binding limit
- Leave at credit × avg daily salary
Reviewed by CA team
Estimates only — rules change frequently. Please verify with a CA before you file, invest, or sign anything.
Assumptions
- Statutory cap of ₹25,00,000 applies (post 01-Apr-2023).
- Calculator assumes no prior leave-encashment exemption claimed from another employer.
- Excludes encashment during service — that is fully taxable.
Exempt vs taxable
How this is calculated
Reviewed by CA teamFor non-government employees the exemption is the LEAST of: 1. ₹25,00,000 (statutory cap, raised w.e.f. 01-Apr-2023) 2. Actual leave encashment received 3. 10 × average monthly salary (last 10 months, Basic + DA forming part of retirement benefits) 4. (Leave days at credit ÷ 30) × average monthly salary Government employees: 100% exempt u/s 10(10AA)(i).
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