New Delhi, May 25 (Agency) In line with announcement made by Finance Minister Nirmala Sitharaman in Budget 2023, the government has raised the tax exemption limit on leave encashment to Rs 25 lakh for non-government salaried employees. The tax exemption was earlier upto a limit of Rs 3 lakh only. In a media release issued on Thursday, Finance Ministry said that aggregate amount exempt from income-tax shall not exceed the limit of Rs 25 lakh where any such payments are received by a non-government employee from more than one employer.
“Further, the amount exempt from income-tax under section 10(10AA)(ii) of the Act shall not exceed the limit of Rs 25 lakh as reduced by the tax exemption already allowed in the total income of the employee under section 10(10AA)(ii) of any previous year or years,” it said. The increased limit for tax exemption will come into effect from April 1, 2023.