🏖️ Salary Calculator
Leave Encashment
Calculate your leave encashment payout and see how much is tax-exempt under Section 10(10AA) for private and govt employees.
🏖️ Leave Encashment Calculator
📋 Tax exemption limits
Private: Exempt up to ₹25 lakh
Govt employees: Fully exempt under Section 10(10AA)
Govt employees: Fully exempt under Section 10(10AA)
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Enter your salary and leave balanceLeave encashment is calculated on your Basic + DA. See how Basic fits into your full package using our CTC components guide. The tax exemption under Section 10(10AA) is explained alongside other exemptions in the salary terms glossary.
How Leave Encashment Calculator Works
Calculate your leave encashment amount and tax exemption instantly.
1
Enter Leave Balance
Input the number of earned/privilege leaves you have accumulated in your leave balance.
2
Enter Salary Details
Add your basic salary and dearness allowance (DA). Leave encashment is calculated on per-day basic+DA rate.
3
Check Tax Exemption
The tool applies the Section 10(10AA) exemption formula and shows how much of your encashment is tax-free vs taxable.
Frequently Asked Questions
What is leave encashment?
Leave encashment is the payment you receive from your employer in exchange for unused earned/privilege leaves. It can happen while you are still employed (if your company allows encashment during service) or at the time of resignation or retirement.
Is leave encashment taxable in India?
For government employees, leave encashment at retirement is fully tax-exempt under Section 10(10AA). For private sector employees, the exemption is limited to the least of: (1) actual leave encashment, (2) 10 months' average salary, (3) ₹25 lakh (revised limit), or (4) leave salary for unutilised leaves.
How many leaves can be encashed?
This depends on your company's leave policy. Most companies allow encashment of 30-60 earned leaves per year, with a cap on carryforward (often 90-120 days total). Government employees can encash up to 300 days of accumulated leaves at retirement.
What salary is used for leave encashment calculation?
Leave encashment is typically calculated on the basis of Basic Salary + Dearness Allowance (DA) only — not your full CTC or gross salary. Per-day rate = (Basic + DA) / 26 working days.
Can I be taxed on leave encashment received mid-service?
Yes. Leave encashment received while still employed (not at retirement/resignation) is fully taxable as salary income with no exemption under Section 10(10AA). Only encashment at the time of leaving or retirement qualifies for the exemption.