Under section 19 (Table item 14) of the Income-tax Act, 2025, leave encashment received on retirement by an employee who is not a Central or State Government employee is deductible up to the least…

Table item 14 under section 19 of the Income-tax Act, 2025 caps the earned-leave entitlement at thirty days for every year of actual service when the cash equivalent of leave salary is worked out. The other limits are ten times the average monthly salary for the ten months before retirement, the amount notified by the Central Government and the amount actually received. Government employees, under Table item 13, get the entire amount without these limits.