T014 · Indian Tax, GST & Statutory

Leave Encashment Tax Exemption Calculator (₹25 Lakh Cap)

लीव एनकैशमेंट टैक्स छूट कैलकुलेटर (₹25 लाख सीमा)

Calculate tax-free vs taxable Leave Encashment at retirement or resignation under Section 10(10AA) with the ₹25,00,000 exemption limit for non-government employees.

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Quick Examples:

Calculated Output & Breakdown

Tax-Exempt Leave Encashment u/s 10(10AA)
₹4,00,000
Exempt Amount
₹4,00,000
Taxable Portion
₹50,000
10 Months Avg Salary
₹5,00,000
Cash Equiv. of Leave
₹4,00,000
Section 10(10AA) LimbAmount (₹)
1. Actual Leave Encashment Received₹4,50,000
2. Statutory Maximum Cap₹25,00,000
3. 10 Months Average Basic + DA₹5,00,000
4. Cash Equivalent of Unavailed Leave (Days / 30 × Avg Salary)₹4,00,000
Tax-Exempt Amount (Minimum of 1–4)₹4,00,000
Taxable Leave Encashment₹50,000
Leave encashment exemption u/s 10(10AA) is allowed even under the New Tax Regime on retirement/separation.

About this tool

Estimate the exempt and taxable portions of a leave-encashment scenario using the employment, salary and leave values entered. Review service records and prior relevant claims before treating the result as a filing figure.

Calculations and file processing run in this browser tab. The tool does not send working inputs or files to our hosting server.

हिंदी में जानकारी: लीव एनकैशमेंट टैक्स छूट कैलकुलेटर (₹25 लाख सीमा)

मुख्य इनपुट और नियंत्रण हिंदी में देखने के लिए ऊपर “🇮🇳 हिंदी में देखें” चुनें। गणना और फ़ाइल प्रोसेसिंग इसी ब्राउज़र टैब में होती है; टूल आपके इनपुट हमारी होस्टिंग पर नहीं भेजता।

Features

  • Work with Actual Leave Encashment Received (₹); Last 10 Months Avg Basic + DA (₹); Eligible Unavailed Leave Days (Capped at 30 days/yr).
  • Review Exempt Amount; Taxable Portion; 10 Months Avg Salary in the result breakdown.

Benefits

  • Separate the estimated exempt and taxable amounts.
  • Check the effect of leave and wage assumptions.

Who should use this tool?

  • Employees reviewing a retirement payment.
  • Payroll teams preparing a settlement worksheet.

How to use

  1. Complete the labelled fields for your scenario, including Actual Leave Encashment Received (₹); Last 10 Months Avg Basic + DA (₹); Eligible Unavailed Leave Days (Capped at 30 days/yr). Use the units shown beside each field.
  2. Try the example labelled “₹4.5L Received, ₹50k Avg Basic, 240 Days Leave” if you want to check the workflow first.
  3. Select Calculate / Run Tool and review Tax-Exempt Leave Encashment u/s 10(10AA) and Exempt Amount; Taxable Portion.
  4. Check the assumptions and limitations below. Adjust a value to compare scenarios, then copy or download the result you need.

Try these worked examples

ScenarioExample inputsExample result
₹4.5L Received, ₹50k Avg Basic, 240 Days LeaveActual Leave Encashment Received (₹): 450000Last 10 Months Avg Basic + DA (₹): 50000Eligible Unavailed Leave Days (Capped at 30 days/yr): 240₹4,00,000
₹30L Received, ₹2.8L Avg Basic, 300 Days Leave (Hits ₹25L Cap)Actual Leave Encashment Received (₹): 3000000Last 10 Months Avg Basic + DA (₹): 280000Eligible Unavailed Leave Days (Capped at 30 days/yr): 300₹25,00,000

Reference and processing

Income Tax Department India — Section 10(10AA) CBDT Notification (₹25 Lakh Limit) · Listed applicability: AY 2026-27

Calculations and file processing run in this browser tab. The tool does not send working inputs or files to our hosting server.

FAQs

Why do previous claims or employment details matter?

The applicable treatment can depend on employment type and limits that apply across relevant claims. The entered scenario must reflect those circumstances; the tool cannot verify employment records.

Which inputs do I need for Leave Encashment Tax Exemption Calculator (₹25 Lakh Cap)?

Use Actual Leave Encashment Received (₹); Last 10 Months Avg Basic + DA (₹); Eligible Unavailed Leave Days (Capped at 30 days/yr). The built-in examples show how those fields fit together.

What should I check before using this result?

Government employees receive 100% exemption on retirement leave encashment; private sector cap is ₹25,00,000 across employers. Check current official rules and your own circumstances before making a filing or financial decision.

What happens to the information I enter?

Calculations and file processing run in this browser tab. The tool does not send working inputs or files to our hosting server. Tool favourites save only tool IDs in this browser. Sharing sends the tool link, not your working values or files.

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Leave Encashment Tax Exemption Calculator (₹25 Lakh Cap) T014

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