Tribunal grants full relief to SBI retiree over leave encashment tax dispute

A retired State Bank of India employee from Jaipur received Rs 9.29 lakh as leave encashment when he retired in 2020. The tax authorities capped his exemption at Rs 3 lakh, treating the amount as taxable beyond that limit. The retiree, who was unaware that SBI staff fall under non-government employee rules for leave encashment, had not paid tax on the sum. The Income Tax Appellate Tribunal (ITAT) has since granted him full relief, overturning the cap. The case turned on how income tax law classifies SBI staff for leave encashment exemption purposes.