Leave Encashment Calculator India: Tax Exemption up to ₹25 Lakh
Calculate the tax-free part of leave encashment in India when you retire or resign: the ₹25 lakh limit, 10 months' salary and 30 days of leave per year.
The exemption applies when you retire or resign. Leave encashed while still in service is fully taxable. The ₹25 lakh limit is for your whole career.
What it does
Leave encashment is the payment for earned leave you did not take. For non-government employees it is tax-free, at retirement or resignation, up to the least of four amounts: ₹25 lakh over a whole career (raised from ₹3 lakh in 2023), 10 months of average salary, the cash value of the leave due counted at no more than 30 days for each completed year of service, and the amount actually received. Government employees get it fully tax-free.
How to use it
- Type the average monthly basic + DA of the last 10 months and the days encashed.
- Type the years of service and, if different, the amount received.
- Read the tax-free and taxable parts.
The arithmetic runs in your browser. Nothing you type is sent anywhere and nothing is stored, so you can use these with real numbers.
Frequently asked questions
Is 300 days of leave tax-free after 20 years?
With ₹60,000 a month, 300 days are worth ₹6,00,000, equal to 10 months' salary and within the 30 days a year: all of it is tax-free.
And after only 5 years?
Only 30 days per year count, 150 days or ₹3,00,000; the other ₹3,00,000 is taxable.
Is the ₹25 lakh limit per employer?
No, it is for your whole working life. If you already used ₹23 lakh, only ₹2 lakh more can be tax-free.
🎁 Gratuity Calculator India 2026 (new Labour Code rules)
🏠 HRA Exemption Calculator India FY 2026-27 (8 metro cities)
🏦 EPF Calculator India: Provident Fund Corpus at 8.25% Interest
📈 India Capital Gains Tax Calculator FY 2026-27 (LTCG and STCG)
🇮🇳 India In-Hand Salary Calculator