Leave Encashment Calculator
Leave encashment, the part exempt under s.10(10AA) with the ₹25 lakh limit, and the tax on the rest
Leave encashment
₹50,000
- Per day
- ₹1,667
- Exempt
- ₹50,000
- Taxable
- ₹0
- Tax at 30% + cess
- ₹0
- In hand after tax
- ₹50,000
On leaving service: the least of four amounts is exempt.
Exempt: the least of four
- Limit (₹25,00,000 less earlier claims)
- ₹25,00,000
- Amount received (applies)
- ₹50,000
- Ten months’ salary
- ₹5,00,000
- Leave to credit, at most 30 days a year of service (applies)
- ₹50,000
- Exempt
- ₹50,000
Rates as per Union Budget 2026 (no change to rates) · Income-tax Act, 2025 · verified 2026-08-13. Figures apply to tax year 2026-27. The Income-tax Act, 2025 replaced the 1961 Act on 1 April 2026 and renumbers sections; rates are unchanged. This tool is an estimate, not tax advice.
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How this is calculated
Formula
encashment = (basic + DA) ÷ days in month × leave days
With your numbers
- 1Salarybasic × (1 + DA%)₹50,000 × (1 + 0%) = ₹50,000
- 2Per daysalary ÷ 30₹1,667
- 3Encashmentper day × days₹1,667 × 30 = ₹50,000
- 4Exempt₹50,000 (on leaving service: the least of four amounts is exempt.)
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