How To Encash Privilege Leave On Retirement ?

How To Encash Privilege Leave On Retirement ? – Privilege Leave is the facilities provided to their employees by any employer. There is the system for encashing the Privilege Leave with certain organization in monetary term as like in Banking sectors, Central Government, PSU etc. The rules for Banking sector have been modified after the 10th Bipartite settlement.

Process To Encash the Privilege Leave

The following instruction shows the eligibility criteria and process to encash the Privilege Leave

  1. Eligible components of Pay and allowances are Basic Pay, Dearness Allowance, HRA, CCA, Split Duty allowance, Special Area Allowance, Project Area Allowance, Hill and Fuel Allowance, PQP, Deputation allowance, Personal allowance, Fixed Pay Allowances and Notional HRA applicable to the place of posting (if quarters provided) is to be included for encashing Privilege Leave.

      2. The pro-rata PL earned during the year till the date of retirement is to be credited to the PL account. Payments are made at the Branch/Office where the                employee has retired from service. Maximum of 240 days of PL can be encashed as per the 10th Bipartite for Banking sector.

       3. Encashment of privilege leave on retirement is exempt up to a maximum of 3,00,000/- which is to be calculated on the basis of Average Salary (BP + D.A           + Other Allowances ranking for EPF) drawn during the last 10 months immediately preceding cessation of service.

       4. Privilege Leave encashment are subject to Income Tax.Calculate Your Income Tax FY 2015-16 automatically here

  1. I was retired from State Bank of India in 31/1/15 & got leave encashment in 8/5/17 Rs.515000/- is taxable & how will caculate the income tax.

    With Regards,

Leave a reply

Digital Banking FAQs & Helpdesk