NCOA Upbeat As Government of India Accepts Demand For Revising Tax Exemption Limit Of Leave Encashment For PSU Employees In Toto
Budget announces leave encashment for for PSU employees who are now at par with Central & State Government employees
Finance Minister Smt. Nirmala Sitharaman, in her budget speech, today, accepted the demand of National Confederation of Officers Association, the apex body of Executives of Central Pubic Sector undertaking, for enhancing the limit of tax exemption of leave encashment of retirement from existing 3.0 Lakh to 25 Lakh.
National Confederation of Officers Association, the apex body of Executives of Central Pubic Sector Undertaking (NCOA), had earlier approached the Prime Minister, Shri Narendra Modi, vide letter dated 3rd January 2023, for intervention to enhance 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 had 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. Finance Minister too in her speech has quoted the same justification and revised the limit exactly as demanded by NCOA.
This is a great relief to lakhs of non-government employees, who had to shell out substantial chunk of his/her leave encashment.
Reacting on the budget speech, Shri Alok K Roy, President of NCOA, told www.indianpsu.com that he is highly appreciative towards Hon’ble PM and the FM for accepting the long pending issues, which would be great relief for central Public Sector employees, at the time of superannuation.
The letter written by NCOA to Prime Minister Shri Narendra Modi, earlier, is given below for the viewers of www.indianpsu.com –
