Notification No. 31/2023-Income-Tax has been issued by the Central Board of Direct Taxes (CBDT) to announce the revised tax exemption limit on leave encashment for non-government salaried employees.
A recent gazette has been issued to communicate the exemption limit for Income Tax on Leave Encashment. The exemption limit has been set at up to Rs. 25 lakhs and it will come into effect from April 1, 2023.
The Central Board of Direct Taxes (CBDT) has announced an increase in the tax exemption on leave encashment for non-government salaried employees from ₹three lakh to ₹25 lakh. The new tax exemption was disclosed in a statement released on Thursday by the tax authority. This move will benefit non-government salaried employees by providing them with greater tax relief on their retirement from service.
The Ministry of Finance, Department of Revenue, Central Board of Direct Taxes has issued a notification on May 24, 2023. The notification specifies the maximum amount that employees can receive as cash equivalent for their leave salary at the time of retirement, whether it is due to superannuation or otherwise. The limit for this amount is set at Rs. 25,00,000. This rule has come into effect from April 1st, 2023.
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