Leave Encashment Calculator
Calculate your retirement/resignation encashment & tax exemptions
₹ 0
Leave Encashment Calculator – Calculate Retirement & Resignation Benefits Accurately
Planning retirement or switching jobs? Use our Leave Encashment Calculator to instantly compute your leave encashment amount, tax exemption, and taxable portion as per Income Tax Act Section 10(10AA).
This advanced calculator is designed for private employees, PSU staff, and government employees to help them understand how unused earned leave converts into cash at the time of retirement, resignation, termination, or superannuation.
What is Leave Encashment?
Leave encashment refers to the monetary value paid by an employer for unused earned leaves accumulated by an employee during their service period. The amount received may be fully exempt, partially exempt, or taxable, depending on the employee category and income tax rules.
Who Can Use This Leave Encashment Calculator?
This calculator is useful for:
- ✅ Private sector employees
- ✅ Non-government employees
- ✅ PSU employees
- ✅ Central & State Government employees
- ✅ Employees planning retirement or job change
- ✅ HR & payroll professionals
Key Features of Our Leave Encashment Calculator Pro
- ✔ Accurate calculation as per FY 2024-25 rules
- ✔ Separate logic for Government & Non-Government employees
- ✔ Automatically applies ₹25 lakh tax exemption limit
- ✔ Calculates gross encashment, exempt amount, and taxable income
- ✔ Earned leave capped at 30 days per year (as per IT rules)
- ✔ Visual chart-based tax breakup
- ✔ Mobile-friendly & instant results
- ✔ No login, no signup – 100% free
How Leave Encashment is Calculated
- Step 1: Monthly Salary
- Basic Salary + Dearness Allowance (DA)
- Step 2: Daily Salary
- Monthly Salary ÷ 30
- Step 3: Earned Leave Balance
- (Total Leaves Earned – Leaves Taken)
- Step 4: Gross Leave Encashment
- Earned Leave Balance × Daily Salary
Leave Encashment Tax Rules – Section 10(10AA)
For Government Employees
- ✅ Fully exempt from tax
- Entire leave encashment amount is tax-free
For Non-Government / Private Employees
Tax exemption is the minimum of the following four:
- Actual leave encashment received
- ₹25,00,000 statutory limit
- 10 months’ average salary
- Cash equivalent of earned leave (max 30 days/year)
Any amount exceeding the exempt portion becomes taxable as salary income.
Why Use an Online Leave Encashment Calculator?
Manual calculation of leave encashment can be confusing due to multiple conditions and tax limits. Our calculator ensures:
- ✔ Zero calculation errors
- ✔ Compliance with latest income tax rules
- ✔ Clear visibility of tax liability
- ✔ Better retirement & tax planning
Example: Leave Encashment Calculation
If an employee has:
- Monthly Salary (Basic + DA): ₹60,000
- Service Period: 20 years
- Earned Leave Balance: 240 days
- The calculator instantly shows:
Gross Encashment Amount
- Exempt Amount under Section 10(10AA)
- Taxable Portion added to income
Benefits of Leave Encashment Planning
- 📌 Better retirement corpus planning
- 📌 Helps estimate tax liability in advance
- 📌 Useful for salary restructuring decisions
- 📌 Supports financial & investment planning
Frequently Asked Questions (FAQ) – Leave Encashment Calculator
- Q1- Is leave encashment taxable?
- Yes, it may be fully or partially taxable depending on whether you are a government or non-government employee.
- Q2- What is the maximum tax-free leave encashment limit?
- For non-government employees, the maximum exemption limit is ₹25 lakh (lifetime).
- Q3- Is leave encashment taxable on resignation?
- Yes. Leave encashment received during resignation is taxable based on Section 10(10AA) rules.
- Q4- Does DA count for leave encashment?
- Yes, Dearness Allowance forming part of retirement benefits is included in salary calculation.
Conclusion: Start Calculating Your Leave Encashment Now
Use our Leave Encashment Calculator FY 2024-25 to get instant, accurate, and tax-compliant results. Whether you’re planning retirement or changing jobs, this tool helps you make informed financial decisions with confidence.
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