Do we include HRA component for Leave Encashment? ...
# general-qna-forum
r
Do we include HRA component for Leave Encashment? As far as i know its Basic+DA(which most of the private org dont have)? Could one of you pls confirm.
a
Thanks for asking Albus
Leave encashment calculations typically include only the Basic Salary and Dearness Allowance (DA) components, and not the House Rent Allowance (HRA). Most private organizations do not have a DA component, so the calculation would be based solely on the Basic Salary. However, it is essential to note that leave encashment policies and calculations may vary from one organization to another. It's always a good idea to consult your company's HR department or refer to your employment contract for specific details regarding leave encashment calculations in your organization.
w
@Rashmi Utnal Leave Encashment is as per the company policy. If it is Basic + DA, it is tax exempt. If it is anything more, the more gets taxed.
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r
Thanks @Wristy
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