Cash reward for not taking leaves from work: Govt hikes tax exemption on leave encashment

While announcing the Union Budget for the next fiscal year that starts April 1, Finance Minister Nirmala Sitharaman on Wednesday proposed to hike tax exemption on leave encashment on retirement of non-government salaried employees to ₹25 lakh from ₹3 lakh.

"The limit of ₹3 lakh for tax exemption on leave encashment on retirement of non-government salaried employees was last fixed in the year 2002, when the highest basic pay in the government was ₹30,000 pm. In line with the increase in government salaries, I am proposing to increase this limit to ₹25 lakh," Sitharaman said.