“The budget is aimed at wooing the common man who is earning income through salary. The late inflationary pressure in the economy has dented the buying capacity of the common man as compared to earlier times. Apart from another measure, one such measure that has been announced is towards leave encashment,” said Saurrav Sood, Practice Leader – International Tax & Transfer Pricing, SW India.
Leave encashment is the amount you get paid for a number of leaves that are accumulated in your total leave balance at the time of retirement or otherwise. The amount so received is exempted under Section 10(10AA) of the Act read along with notification dated 31st May 2002 to the extent of Rs. 300,000.
“The proposed revision will help the employees in getting more dispensable income in their hand,” Sood said.
