Central Government Caps Leave Encashment at Rs. 3,00,000 for Retiring Government Employees Under Section 10(10AA) of Income-tax Act.

The Central Government has set a maximum limit of Rs. 3,00,000 for leave encashment under section 10(10AA) of the Income-tax Act, 1961. This applies to government employees retiring, either through superannuation or otherwise, after April 1, 1998. The amount represents the cash equivalent of earned leave at the time of retirement. This specification was formalized in Notification No. 123, dated May 31, 2002, by the Under Secretary to the Government of India.

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