Revenue Secretary Sanjay Malhotra in New Delhi. File
| Photo Credit: ANI
The authorities has notified a hike within the tax exemption restrict for leave encashment advantages acquired by salaried workers on the time of retirement from ₹3 lakh to ₹25 lakh, as promised within the Union Budget.
The modified tax remedy, which will probably be efficient from April 1, 2023, may benefit 50% of non-public revenue tax payers, who’re salaried employees, as per Revenue Department estimates.
Union Finance Minister Nirmala Sitharaman had famous throughout her Budget 2023-24 speech that the restrict of ₹3 lakh for tax exemption on leave encashment on retirement of non-government salaried workers was final fastened within the yr 2002, when the best fundamental pay within the authorities was ₹30,000 monthly. “In line with the increase in government salaries, I am proposing to increase this limit to ₹25 lakh,” she had stated.
Revenue Secretary Sanjay Malhotra had instructed The Hindu that this tax exemption hike would successfully translate into potential financial savings of ₹7 lakh in taxes that might have been payable earlier than this modification.
“That is almost ₹20,000 of savings a year over a 33-year working life,” he had identified. Employees who change to the brand new exemption-free revenue tax regime within the yr of their retirement will even profit from this transformation, Mr. Malhotra stated.
