Leave Encashment Calculator – India

Standard formula: (Basic Salary + DA) / 30 × Number of Leave Days. For ₹50,000 basic with 30 days leave: Encashment = (50,000/30) × 30 = ₹50,000. Companies may use gross salary or different divisors.

During employment: Fully taxable as salary income. At retirement/resignation: Exempt up to specified limits under Section 10(10AA). Government employees get full exemption. Plan encashment strategically for tax efficiency.

Exemption is lowest of: 1) ₹25,00,000 (increased from ₹3L in 2023), 2) 10 months average salary, 3) Cash equivalent of leave credit (max 30 days per completed year). Balance above exemption is taxable.

Depends on company policy. Most allow encashment of earned leave (EL/PL), not casual or sick leave. Some cap annual encashment (e.g., max 15 days/year). Full accumulation usually encashable at exit.

Typically only Earned Leave (EL) or Privilege Leave (PL) can be encashed. Casual Leave (CL) and Sick Leave (SL) usually lapse if unused. Some companies have combined leave policies. Check your HR policy.

Tax-wise, at retirement/resignation is better due to exemption. During service, encash if: you need cash urgently, leave may lapse, or you're in lower tax bracket. Consider work-life balance too.

Varies by company. Government: up to 300 days typically. Private: usually 30-90 days cap, excess lapses. Some allow unlimited accumulation but limit encashment. Check company policy.

Yes. Government employees get full exemption on leave encashment at retirement. Private employees: exemption capped at ₹25L. Government employees can accumulate more leave (up to 300 days vs typical 60-90 in private).

Most companies encash unused earned leave at full and final settlement. Notice period may be adjusted against leave balance. Some companies forfeit leave if not served proper notice. Get policy clarification before resigning.