How to change Leave Encashment tax exemption amount for exit employees during Fnf?

How to Change Leave Encashment Tax Exemption for Exit Employees in Keka

Leave Encashment is the payment made to an employee for unused paid leaves, typically at the time of resignation or retirement. Many organizations allow employees to carry forward unused paid leaves, and the compensation for these unutilized leaves is subject to taxation. In Keka, you can update the tax exemption amount for leave encashment during the Full and Final (FnF) process.

Steps to Change Leave Encashment Tax Exemption:

1. Go to Org > Exits > Exit Process

2. Navigate to the Exits in Progress tab

3. Search for the employee whose leave encashment exemption you want to update

4. Click on Manage under the Actions column next to the employee's name

5. In the employee details page, go to the Finances tab and click Review & Finalize

6. In Step 1: Payables Components, scroll down to the Leave section

7. Locate the Tax on Leave Encashment section and update the exemption amount

8. Click Save & Next and proceed with the remaining steps until you finalize the FnF process

By following these steps, you can ensure accurate tax treatment for leave encashment during an employee’s exit.