What is Leave Encashment? Is it taxable?

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• I am the legal heir of a Government Servant who died in harness. I have received certain amount as leave Salary encashment upon his death, in the capacity of his legal heir. Is it taxable as income from Salary?

  This receipt in the hands of the family is not in the nature of one from an employer to an employee. The deceased had no right or interest in this receipt. This payment is only by way of financial benefit to the family of the deceased Government ...

• How is Leave Travel Concession taxed?

  If the employee is allowed a leave travel allowance or concession by his employer towards travel for himself and his family (includes spouse, dependent parents and siblings of the employee and his two children) in India, such an amount of allowance ...

• Is the compensation on Voluntary Retirement Scheme (VRS) taxable?

  Compensation on account of VRS is taxable as profits in lieu of Salary as per section 17(3) of the Income Tax Act. But in case of VRS by employees of Government/Semi-Government/Local Authorities/PSUs etc, this compensation is exempt up to the amount ...

• After adopting PTS and computing my taxable income at 50% of my receipts, can I claim any other deductions from such taxable income?

  No. The income computed at the given rate shall be the final taxable income on which you have to compute tax and no further deductions are allowed from this income.

• Being a professional, I adopt the PTS. How should I compute my taxable business income?

  If you adopt PTS as a professional, then your taxable income shall be 50% of your turnover or receipts. For example, if your receipts or your annual turnover is Rs.48 lacs, then you must declare taxable profits at 50% of the turnover i.e Rs.24 lacs.