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About this tool
Taxable vs exempt leave encashment on retirement for private employees.
Leave Encashment Tax Calculator runs the section 10(10AA)(ii) four-way test that decides how much of a private-sector retirement payout is tax free: the amount actually received, the Rs 25 lakh lifetime ceiling that applies from 1 April 2023, ten months of average salary from the last ten months, and the cash value of unavailed leave counted at a maximum of 30 days per completed year. It shows each limb, the binding one, and the balance that is added to salary income. Government retirees and encashment taken while still in service are handled with their own rules.
Open Leave Encashment Tax Calculator on AltFTool — it loads instantly in your browser.
Enter the values you already know.
Fine-tune the options to match your scenario.
Read the result and use it in your planning or reporting.
Received, Rs 25 lakh ceiling, ten months of salary and cash value of leave - each printed so you can see which one caps you.
Generous company leave policies are trimmed to the statutory 30 days per completed year, the way the assessing officer would.
Leave encashed while working is fully taxable, and the tool says so instead of silently applying the retirement exemption.
The exemption is the least of the amount received, Rs 25,00,000 (the limit notified from 1 April 2023), ten months of average salary of the last ten months, and the cash value of unavailed leave at up to 30 days for each completed year of service.
The same section 10(10AA)(ii) exemption applies on resignation as on retirement for non-government employees. What is fully taxable is leave encashed while you are still in service.
No, it is a lifetime limit. Any exemption you already claimed on leave encashment from earlier employers reduces what is left, so enter that amount to get an accurate figure.
Leave encashment received by Central or State government employees at retirement is fully exempt under section 10(10AA)(i). Encashment during service is still taxable.
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