Dear [Login to view],
Answer to you, are as under:
As regards to Gratuity at the time of resignation and retirement :
Govt. employees - no Tax
Other than Govt. employees / Gratuity as per POG Act - exemption up to Rs. 10 lacs.
If gratuity is received in earlier years then exemption at time of retirement will reduce to that extent, subject to the overall limit of 10 lacs.
As regards to leave encashment on resignation and retirement:
Govt. employees - no Tax
Other than Govt. employees - exemption on least of the following:
1. Leave encashment actually received
2. Average salary of 10 months
3. Equivalent to maximum 30 days unavailed leave if any per every year of completed service
4. Rs. 3 lacs.
Salary for this purpose is only Basic + DA.
One can correct me if I am wrong.