Income Tax not to be levied on leave encashment by employees.

Income Tax not to be levied on leave encashment by employees.

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Paramesham A started this petition to Central Government and

In the latest budget it was proposed to levy Income Tax on leave encashment of a retiring employee w.e.f. 1st April 2021. This taxation is utterly unjustified and is very harsh on the employees retiring after March 2021. Hitherto, leave encashment has been tax free. Due to this new tax, employees who saved leave during long period of their service will suddenly be punished for prudence. Moreover, had they known about this change earlier, they would have utilised the leave. For example, I will be retiring in May 2021 after 34 years of service. I am in the 30% of tax bracket.  Had I known about this new tax I would have used my leave instead of saving it in the hope of encashing it. Now, with this new tax I will be losing 1/3 of my leave encashment, which is huge shocking financial loss. There will be many who will be adversely affected like me.

I earnestly request to do away with this new Income Tax on the amount of leave encashment to be received after many years of service. Denying existing facility is very painful to many like me who would have saved leave at the cost of time to have been spent with their families.

At the most this new tax may be applied on that part of the leave accrued after 1st April 2021 i.e. prospectively.

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