NCOA Seeks PM’s Intervention For Revising Tax Exemption Limit Of Leave Encashment To Rs. 25 Lakhs
Leave encashment for Central & State Government employees are non taxable without any limit, but not for PSU employees
National Confederation of Officers Association, the apex body of Executives of Central Pubic Sector Undertaking, approached the Prime Minister, Shri Narendra Modi, for enhancing the limit of tax exemption of leave encashment of retirement from existing 3.0 Lakh to 25 Lakh.
The leave encashment for Central & State Government employees are non taxable without any limit, while the same is taxable beyond 3.0 Lakh for non-government employees including Public sector Undertakings and Banks u/s 10(10AA){ii) of Income tax Act, 1961. The limit of 3.0 Lakh was last revised in 2002, when the Basic pay of highest bureaucrat i.e. Cabinet Secretary was capped at Rs 30,000 p.m, which shows that it was arrived at ten times of monthly basic pay of Cabinet Secretary.
Taking the same logic, NCOA has requested to revise the limit to Rs 25.0 Lakh, as the Basic pay of Cabinet Secretary has been capped at Rs 2.5 Lakh p.m. Accordingly the NCOA has sought the intervention of PM for issuance of fresh Gazette Notification under clause (ii) of Section 10(10AA) of the Act, for enhancing the limit to Rs 25.0 Lakh, to render justice to all the non-government employees.
