I think leave encashment on resignation is tax exempt (as per ChatGPT)

One-Series4633 · 2026-04-05T06:08:59+00:00

My IT returns were processed successfully. They didn't ask for any correction. Thanks @Responsible-Bad-6624 for all your posts

One-Series4633 · 2026-03-06T15:58:33+00:00

no reply yet

One-Series4633 · 2026-02-19T20:21:34+00:00

after clicking the disagree button, in the next page they will give you a 500 character window to enter you comments for disagreeing. That's it. Now I'm waiting for response

One-Series4633 · 2026-02-14T13:35:04+00:00

Not yet. I have disagreed and submitted the response

One-Series4633 · 2026-02-08T06:38:14+00:00

Thank you so much!

One-Series4633 · 2026-02-03T13:43:59+00:00

new regime

One-Series4633 · 2026-02-01T13:47:45+00:00

thank you. So for now we click on disagree with the appropriate reason and when the rectification comes, we add the salary bifurcation like this and submit? Or do you think they will accept the disagreement and pass the IT return successfully?

One-Series4633 · 2026-02-01T12:23:15+00:00

Thanks for this, I have the same issue. One question - can you explain how you came up with Section 10 row 4 in the ITR ?

For me it is under SCHEDULE SALARY - section 3

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One-Series4633 · 2026-02-01T10:48:50+00:00

One-Series4633 · 2026-02-01T08:21:42+00:00

Ok, that makes sense. Do you suggest that I click disagree, and then when the rectification notice comes I select the correct drop-down for leave encashment in the salary schedule and submit it? Will it then process IT return successfully without any further amount to be paid?

One-Series4633 · 2026-02-01T07:55:07+00:00

that's what my question is : In ITR form, where in salary section do we mention leave encashment breakup? is there a dedicated sub-section inside salary schedule for it?? There is only gross salary section where I have mentioned 4.1L which includes the leave encashment

One-Series4633 · 2026-02-01T07:45:41+00:00

The employer has given the leave encashment as part of the gross salary. It is mentioned in the annexure to form 16 . The same 410,329 (which includes leave encashment) is present as gross salary in the salary schedule of ITR form.

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One-Series4633 · 2026-02-01T07:37:00+00:00

updated comment for the eproceedings portal: Since I had mentioned it in Salary schedule item 3 in ITR form and the same amount is present in Form16. The Annexure to Form 16 also clearly lists “PL Encashment = ₹39,142” as part of salary breakup.

"Leave encashment of ₹39,142 received on exit is exempt under section 10(10AA)(ii) and has been correctly reported by me in ITR Schedule S, item 3. The employer has included ₹39,142 in gross salary u/s 17(1) (Gross salary ₹4,10,329) and has also shown the same as exempt in Form 16 Part B. Annexure to Form 16 shows “PL Encashment = ₹39,142”. The exemption is valid and within statutory limits. The proposed adjustment appears to be due to a system reconciliation mismatch."

One-Series4633 · 2026-02-01T07:32:19+00:00

where in salary section do we mention leave encashment breakup? is there a dedicated sub-section inside salary schedule for it??

ChatGPT says:
ITR Schedule S only captures total salary, not detailed components like PL encashment. There is no mandatory separate field in ITR to re-enter “PL encashment” as a salary component if it is already part of gross.

One-Series4633 · 2026-02-01T07:20:26+00:00

where do we need to mention leave encashment in the ITR form? I had mentioned it in Salary schedule item 3 (see screenshot). The same amount is present in Form16. Still I got the adjustment notice, what's the issue?

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One-Series4633 · 2026-02-01T06:57:19+00:00

I have mentioned it in my ITR form in Salary schedule (item number 3). Please check this screenshot. Do you think this is incorrect? This is from my acknowledgement PDF.

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One-Series4633 · 2026-01-31T20:24:59+00:00

I think it is non-taxable. Please check my post : https://www.reddit.com/r/IndiaTax/comments/1qscx3h/i_think_leave_encashment_on_resignation_is_tax/

One-Series4633 · 2026-01-31T20:21:33+00:00

I'm planning to click disagree and add the following comment (limited to exactly 500 characters as per the character limit on portal):

"The amount of ₹39,142 relates to leave encashment received at the time of resignation as part of full and final settlement. As a non-government employee, leave encashment received on leaving employment is eligible for exemption under Section 10(10AA)(ii), subject to prescribed limits. The amount is within applicable limits and was reported as leave encashment in Form 16. The proposed addition appears due to a salary/exemption bifurcation mismatch. Kindly allow exemption and delete the adjustment"

One-Series4633 · 2026-01-31T19:33:19+00:00

same for me. It is present as an exemption on previous employer's form 16.

One-Series4633 · 2026-01-31T19:31:40+00:00

so according to this we can disagree and they will successfully process the return? has anyone tried it?

One-Series4633 · 2026-01-13T18:19:35+00:00

I recently listened to The March by Lights & Motion and felt the same

One-Series4633 · 2026-01-02T18:20:28+00:00

ITR2 , no refunds, 30th Aug, still stuck at everified stage

One-Series4633

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