I will have 300 earned leaves, 100 sick leaves at retirement. What is most tax-efficient way to encash my leaves before March 2024?

economictimes.indiatimes.com:

I am retiring from Reliance Industries on 31 December 2024. I will have 300 earned leaves and 100 sick leaves encashable at the time of retirement. What is the most tax-efficient way to encash my leaves before March 2024?

Shubham Agrawal, Senior Taxation Adviser, TaxFile.in: The leave encashment received during your employment is fully taxable.

Hence, you should only avail of it at the time of retirement. Starting 1 April 2023, for private sector employees, at the time of retirement, whether on superannuation or otherwise, the upper limit for this exemption is Rs 25 lakh.

I had inherited a residential property at Anand, Gujarat, from my uncle in 2015, through a will. I got a probate of the will in 2017 to get the property transferred in my name. The property was built in 1992, with a land sale deed of Rs 65,000. In November 2023, I sold it for Rs 73 lakh. What will be my tax implication? How can I save tax? I do not plan to buy a new property.

Shubham Agrawal, Senior Taxation Adviser, TaxFile.in: The cost inflation index has been moved to the year 2001 by the Income-tax department.

To calculate the capital gains on this property, you need to get its fair market value as on 1 April 2001 with the help of a registered valuer. After getting this value, you need to apply the cost inflation index and subtract it from the sale proceeds of Rs 73 lakh. The resultant value, if positive, will be your capital gain, which will be liable to tax at 20%, exclusive of cess and surcharge.