Govt fully exempt · Private capped at ₹25L

Leave Encashment Calculator

Works out how much of your leave encashment is tax-exempt under Section 10(10AA) — the rules differ sharply between government and private-sector employees.

This is an estimate, not tax advice. Leave encashment received during service (not at retirement or resignation) is always fully taxable — there's no exemption for it, for either employee type. Verify with your payroll team or a chartered accountant before filing.

Employee type

Government here means central/state government — fully exempt. Local authority and PSU/statutory corporation employees are treated as private sector for this exemption.

Timing

Average monthly salary (last 10 months)

₹

Basic + DA only, not HRA, bonus, or other allowances.

Unutilized leave days being encashed

Years of service

Only affects the exemption calculation for private-sector employees at retirement/resignation — leave credit is capped at 30 days per completed year of service.

TAXABLE AMOUNT

₹0

TRACKED

Frequently asked questions

Why is leave encashment during service fully taxable?

Section 10(10AA) only grants an exemption when leave is encashed at retirement or resignation. Encashment while you're still employed is treated as ordinary salary income under Section 17(1), with no exemption at all — regardless of whether you work in government or the private sector.

What's the difference between government and private-sector rules?

Central/state government employees get a full exemption on leave encashment at retirement, no matter the amount. Private-sector (and PSU/local authority) employees are only exempt up to the lowest of four figures: the amount actually received, 10 months' average salary, the cash value of eligible leave capped at 30 days per year of service, and a statutory ceiling of ₹25,00,000.

Does "10 months' average salary" mean my last 10 months exactly?

Yes — the average of your Basic + DA over the 10 months immediately before retirement or resignation, not any other 10-month period, and not including HRA, bonus, or other allowances.