Is leave encashment considered a taxable income component?

Created by Product Content Team, Modified on Wed, 13 Mar at 5:15 PM by Product Content Team

Leave encashment refers to the practice of converting accumulated unused leave or vacation days into monetary compensation.  

The taxability of leave encashment days depends on the country's tax laws and regulations. 

In India, leave encashment is taxable as per the income tax laws. The tax treatment varies based on factors such as the reason for encashment (retirement, resignation, etc.) and whether it is received during employment or at the time of separation from the organization.

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