ITAT Jaipur Grants Relief in ₹9 Lakh Leave Encashment Tax Dispute
What Happened
The Income Tax Appellate Tribunal (ITAT), Jaipur granted relief to a retired LIC employee who received a tax notice after claiming exemption on ₹9.04 lakh received as leave encashment upon retirement in June 2020. The tax department had restricted the exemption to ₹3 lakh, but the tribunal condoned a 1,277-day delay in appeal filing and ruled in the taxpayer's favour on September 28, 2026.
Key Takeaways
The ruling highlights that tax disputes involving leave encashment continue to evolve after the exemption ceiling for non-government employees was increased to ₹25 lakh in 2023. The tribunal also reaffirmed that taxpayers should not automatically suffer for procedural mistakes made by their tax advisors.