Full Exemption of Leave Encashment Allowed – Government Service Character Prevails Over PSU Status

Bindumadavan Prakash Vs ITO (ITAT Bangalore) Full Exemption of Leave Encashment Allowed – Government Service Character Prevails Over PSU Status The Bangalore ITAT held that leave encashment received on retirement is fully exempt u/s 10(10AA)(i) where such leave pertains to period of service under the Central Government, even if the employee was later absorbed in a PSU like BSNL. The AO had restricted exemption to ₹3 lakh under Section 10(10AA)(ii) (applicable to non-government employees) by treating the assessee as a BSNL employee at retirement. The CIT(A) upheld this view. However, the Tr...