Income Tax

Leave Encashment Tax Calculator

Calculate the exact tax exemption for unavailed leaves when you resign or retire, based on the updated ₹25 Lakh limit under Section 10(10AA).

Employment Details (Non-Govt Employees)

Average of the last 10 months preceding retirement/resignation.

Exclude fractions (e.g. 10.8 years = 10).

Tax rules cap this at max 30 days.

Total leaves consumed during employment.

Tax Exemption Summary

Tax Exempt Amount

₹5,20,000

Total Received₹8,00,000
Taxable Amount₹2,80,000

How is the Exemption Calculated?

For non-government employees, Section 10(10AA) states that the tax exemption is the least of the following four amounts:

  • Actual Amount Received: ₹8,00,000
  • Statutory Limit: ₹25,00,000 (Increased from ₹3 Lakhs to ₹25 Lakhs effective April 1, 2023)
  • 10 Months Average Salary: ₹6,00,000 (Calculated on Basic + DA of the last 10 months)
  • Cash Equivalent of Unavailed Leaves: ₹5,20,000 (Subject to a maximum of 30 days of earned leave for every completed year of service. Fractions of a year are ignored).
Note for Government Employees: If you are a Central or State Government employee, 100% of the leave encashment received at the time of retirement or superannuation is completely exempt from tax.