Income Tax: The Modi government has given great relief to the general public. This is going to affect crores of people of the country.
At the same time, people working in the private sector will get benefit from this. In line with the announcement made in the budget, the Finance Ministry has increased the tax exemption limit on cash amount in lieu of leave encashment for private sector salaried employees to Rs 25 lakh.
Till now, the tax exemption limit for non-government employees on leave encashment i.e. cash received in lieu of holidays was only three lakh rupees. This limit was fixed in the year 2002 when the highest basic pay in the government sector used to be Rs 30,000 per month only. In a statement issued on Thursday, the Central Board of Direct Taxes (CBDT) said that the total limit of tax exemption under section 10(10AA)(2) of the Income Tax Act shall not exceed Rs 25 lakh.
25 lakh rupees
This section is related to the payment received from the employer to the non-government employees. The CBDT said that the system of tax exemption on a maximum amount of Rs 25 lakh received by non-government employees in lieu of leave encashment will be applicable from April 1, 2023. The announcement in this regard was made in the budget proposal for the financial year 2023-24.
While presenting the Finance Minister Nirmala Sitharaman Budget 2023, the Finance Minister had made several important announcements. Along with this, Finance Minister Nirmala Sitharaman had said in her budget speech that the tax exemption limit on the amount received as leave encashment for non-government sector employees will be increased from Rs.3 lakh to Rs.25 lakh.