What is the formula for leave encashment exemption?

The exemption is the least of: 1) Cash equivalent of unutilized leave (max 30 days per year), 2) 10 months' average salary, 3) Maximum limit of ₹25 Lakhs, or 4) Actual amount received.

Is leave encashment taxable during service?

Yes. Any leave encashment received while continuing in service is fully taxable for both government and non-government employees.

What is the leave encashment limit for FY 2026-27?

The maximum tax exemption limit for leave encashment for non-government employees is ₹25,00,000. For Central and State Government employees, it is fully exempt.

Leave Encashment Tax CalculatorFY 2026-27

Calculate tax-exempt leave encashment at retirement or resignation based on Section 10(10AA) and the ₹25 Lakh statutory limit.

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Quick Summary: Leave Encashment Tax Calculator

Leave encashment received at the time of retirement or resignation is tax-exempt under Section 10(10AA). For non-government employees in FY 2026-27, the maximum statutory exemption limit is ₹25,00,000. The actual exemption is the lowest of four factors: the statutory limit, actual amount received, 10 months' average salary, or the cash equivalent of unutilized leave.

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Regulatory Disclaimer · FY 2026-27

Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

Consult a SEBI-registered IA or CA for personalised advice.

9 out of 10 traders in F&O incurred net losses (SEBI 2023). Tax estimates based on IT Act 2025. Trezoriq is not liable for financial decisions based on results.