I am the legal heir of a Government Servant who recently passed away. I received a sum from his employer as retirement cum death benefits, which included an amount for Leave Salary / Encashment. Is this amount taxable?

April 17, 2024 10:39

No. The amount of Leave Salary / Leave Encashment received by the legal heir of a deceased employee is always fully Tax-exempt.

The nature of employment does not matter in this case, as this receipt in the hands of the legal heir is not in the nature of one from an employer to an employee. Thus, this is just a financial benefit to the family of a deceased employee from the employer.

Thus, irrespective of whether the employee is a government servant or a private sector employee, the amount received as Leave Salary / Leave Encashment is always fully exempt if it is received on the death of an employee.

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