Download Automatic Income Tax Preparation Excel-Based Software All in One for the Non-Govt
Employees for the F.Y.2023-24 | CBDT (Central Board of Direct Taxes) see your notification S.O.
2276(E) of May 24, 2023, increased the maximum amount your employees are entitled to receive as
Leave Encashment pay equivalent (vacation replacement) with respect to the period of your credit
leave at the time of your retirement, whether pensionable or otherwise up to Rs. 25,00,000 (twenty-
five lakhs rupees only) and the same is effective from 1st April 2023
Definition of Leave Encashment pay: - According to labor laws, a salaried person is entitled to a minimum paid leave every year, if the employees do not use this holiday, the employer pays it out of wages, this is called the holidays.
The exemption is allowed under a provision under the Income Tax Act of 1961
1) Section 10(10AA) of the Income Tax Act provides the following provision on leave allowances: any remuneration received by an employee of the Central Government or State Government as an amount equivalent to leave pay relating to the period of vacation he took to your credit at the time of your retirement, whether retired or otherwise;
(2) Any remuneration of the kind referred to in sub-section (i) received by an employee, other than an employee of the State or Government, in respect of a substantial portion of the period of leave taken to his credit at the time of his retirement, whether retired or otherwise, not exceeding ten months, calculated on the basis of the average salary earned by the employee during the period of ten months immediately preceding his retirement, whether at the time of retirement or otherwise. Subject to limitation The Central Government may, by notification in the Official Gazette, notify in this regard, subject to the limitation imposed hereunder in respect of the said Government servants:
Provided that when an employee receives such payments from more than one employer in the preceding year, the total amount exempted from income tax under this subsection shall not exceed the limits shown as follows:
Provided, further, that such compensation or payments have been received in the preceding year or years as well as the whole or part of the amount paid or paid has been or has not been included in the gross income of the beneficiary of such compensation previously. Year or years, the amount deducted from income tax under this subsection not exceeding the limit so specified, shall be reduced by the amount or, as the case may be, the total amount not included in the gross income of each such prior year that’s it. Years or years
Explanation —For the purposes of
subsection (ii),
The leave entitlement accrued by the employee shall not exceed 30 days for each year of actual service rendered as an employee of the employer who has retired from his employment
Therefore, the license fee is taxable and
deductible, as explained below.
1. Earned during employment- It is fully taxable whether you are a government employee or a private employee
2. After retirement or departure from the organization
• Exemption for civil servant
• Exclusion for legal heirs of deceased employees
• For private employees, less than the following are excluded
1. Income from holiday pay
2. Maximum limit 25,00,000 (earlier was 3,00,000 and changed to 25,00,000 vide notification no. S.O. 2276(E) dated 24th May 2023)
3. An amount equal to one 30-day unused vacation for each full year of service
4. 10 months of salary based on the average salary of the last ten months immediately before retirement
Salary means- Base + DA (if you agree to terms) + commission (if offered as a percentage of turnovers).
Features of this Excel utility:-
1) This Excel utility perfectly prepares your income tax according to your U/s 115BAC option.
2) This Excel utility has a completely revamped Income Tax section as per Budget 2023
3) Computerized Income Tax Form 12 BA
4) Automatic computation Income Tax Exemption rented house U/s 10(13A).
5) Individual salary structure according to government and private group salary model
6) Individual Pay Sheet
7) Individual tax datasheet
8) Automatic Income Tax Form 16 Part A&B revised for the financial year 2023-24
9) Automatic Income Tax Form 16 Part B revised for the financial year 2023-24
