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Leave Encashment Calculator

Estimate payout & tax exemption on unused leave

Free No signup Indian rules
What this calculator does

Calculate the payout for unused leave and how much of it is tax-exempt.

Leave encashment

Employment type

Good to know

  • Formula: (Basic + DA) ÷ 30 × unused leave days — the calendar-month basis most companies use for encashment.
  • Government employees get full tax exemption on leave encashment received at retirement.
  • Non-government employees get the LOWEST of: amount received, ₹25 lakh lifetime cap, 10 months’ average salary, or leave at credit capped at 30 days/year of service (Sec 10(10AA)).
  • Leave encashed during active service (not on exit) is fully taxable regardless of employment type.

Results

Estimated encashment payout

₹23,333

Per-day rate₹1,167
10-month average salary cap₹3,50,000
Tax-exempt portion₹23,333
Taxable portion₹0

Estimate assumes encashment on retirement or resignation. Your company's leave policy or leave cap may change the exact payout — confirm with HR for your specific figure.

How it works

How this calculator works

Leave encashment pays out unused earned leave, usually calculated as (Basic + DA) ÷ 26 × number of unused leave days. The exact formula and leave cap can vary by company policy.

Leave Encashment Calculator formula

Leave encashment = (Basic + DA ÷ 30) × Number of unused earned leave days

Worked example

Meera resigns with 20 days of unused earned leave. Her Basic + DA is ₹30,000 a month.

  1. Per-day rate = ₹30,000 ÷ 30 = ₹1,000
  2. Leave encashment = ₹1,000 × 20 days = ₹20,000

Meera receives ₹20,000. On retirement or resignation, non-government employees can claim tax exemption up to ₹25 lakh in a lifetime.

Questions

Leave Encashment Calculator: FAQs

For non-government employees, leave encashment received during service is fully taxable. On retirement or resignation, exemption up to ₹25 lakh (combined lifetime limit) applies under current rules.

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