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Leave Encashment Calculator
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Show formula & working
Exempt = least of: amount received; 10 × average monthly salary; leave to credit (≤ 30 days per year of service, less leave availed) × average salary ÷ 30; the exemption limit
Details
Leave encashment tax exemption (non-government employees): rates and rules as of 31-Oct-2026 · Source: Income-tax Act, 2025, s.19(1) Table Sl. 14 — least of leave salary, 10 months' average salary, leave credit (30 days a year) and the limit notified by the Government; ₹25 lakh per CBDT Notification 31/2023 (24 May 2023). Every figure based on it stays editable.
How this works
Leave you do not use can be paid out when you leave. For non-government employees, part of it is exempt from tax.
The exemption is the smallest of four amounts, one of which is a fixed limit set in tax law.
Frequently asked questions
Is leave encashment during service exempt?
No — encashment while in service is fully taxable.
What counts as salary?
Basic pay and DA (if it counts for retirement benefits), plus any commission based on turnover.