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Tax Expert - Answered on Oct 18, 2022

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Shridharan Question by Shridharan on Oct 18, 2022Hindi
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Dear Sir, I was working for DOT Central Govt service since 1985. Later in 1st Oct 2000 BSNL (PSU) was formed and all the employees were absorbed in BSNL. I retired after taking VRS on 31-01-2019. My accumulated EL leave was 117 as on 1st oct 2000.

After my VRS bsnl paid leave encashment for 236 days (Dot period 117+ BSNL period 119 accumulated leave). While making the payment BSNL allowed full tax exemption for dot period and 3 lakh was exempted against leave salary paid and for balance IT recovered. But I got a demand notice from IT dept to pay tax for the entire DOT leave period. Is this correct? If it is exempted rom IT pl share the copy of such Govt order for appeal purpose to IT as support doc to convince them.

Ans: In my view, IT dept is correct in charging tax for DOT period.

Leave encashment received by Central or State Government employee at the time of retirement or resignation is fully exempt.

Accumulated leave of 117 of DOT period is encahsed when you retired from BSNL not from DOT, so in my view, provisions of exemption should not apply.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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