Encashment Amount

₹60,000

Tax Exempt (up to ₹25L)

Fully Exempt

No tax on encashment

Taxable Amount

₹0

Calculation Breakdown
Formula(Last Drawn Salary / 30) × Unused Days
Daily Wage₹2,000/day
Unused Leave Days30 days
Exemption Limit₹25,00,000
Encashment Amount₹60,000
Leave encashment is the amount received for unused leave days. Under Section 10(10AA), leave encashment up to ₹25,00,000 is exempt from tax for private sector employees at the time of retirement. The daily wage is calculated as (Last Drawn Salary / 30).