The High Court considered the issue of Leave Encashment ...

High Court reviewed Leave Encashment exemption & increase in exemption limit for taxing earned leave salary. Petitioners can seek relief from Government.

Case Laws     Income Tax

June 27, 2024

The High Court considered the issue of Leave Encashment exemption u/s 10AA and the retrospective review of income limit for taxing earned leave salary. The petitioners, retired before the latest notification setting the upper limit at Rs. 25 lakhs, sought relief as their earned leave income exceeded Rs. 3 lakhs. The Court acknowledged the limitation on its power and the separation of powers doctrine, stating it cannot mandate the revision of the upper limit with retrospective effect. While sympathetic, the Court emphasized that such policy decisions fall within the Executive's domain. The writ petitions were disposed of, allowing petitioners to approach the Government for relief, with the Government having the discretion to decide on their representations. Any pending interlocutory applications were dismissed.

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