#Section 10(10AA)

ITAT Jaipur ruled the 2023 notification raising the Section 10(10AA) leave encashment limit to ₹25 lakh applies retrospectively to non-government employees retiring before its issuance, treating it as a remedial statutory discharge. The assessee retiring in AY 2020-21 secured full exemption on ₹13.81 lakh encashment. The decision benefits retirees whose payouts exceeded the old ₹3 lakh cap but fall within the revised limit.

ITAT Bangalore holds that BSNL VRS employees absorbed from the Department of Telecommunications qualify as Central Government employees, entitling them to full tax exemption on leave encashment and ex gratia payments under Sections 10(10AA) and 10(10B) of the Income Tax Act. The ruling clarifies eligibility for tax benefits, impacting thousands of former DoT employees transitioned to BSNL.

ITAT Pune has ruled that delays in filing appeals for leave encashment exemptions under Section 10(10AA) may be condoned when the taxpayer’s claim falls well below the enhanced Rs. 25 lakh limit and the delay stems from genuine hardship, not negligence. This reinforces that procedural rigidity must yield to substantive fairness in tax exemptions, benefiting retired employees navigating complex compliance timelines.

The ITAT Delhi has ruled that employees of Indian Institutes of Technology, even as autonomous bodies, qualify for tax-free leave encashment under Section 10(10AA) if governed by Central Government service rules. This clarifies that employer status alone cannot override statutory eligibility when service conditions align with central rules, impacting thousands of academic and technical staff across IITs and similar institutions.