CA claimed leave encashment exemption even though Form 16 doesn't show it

Question :snoo_thoughtful:

Hi everyone,

I switched jobs during FY 2025-26. My new employer didn't consider my previous employer's salary while deducting TDS, so I had some additional tax liability.

My CA said I could either:

  1. file exactly as per Form 16 and pay the additional tax, or

  2. treat a major portion of the amount received from my previous employer as exempt leave encashment, reducing my tax significantly.

The issue is that my Form 16 from the previous employer shows the entire amount as salary and doesn't mention any exempt leave encashment.

The CA said this generally won't get flagged and advised paying a small additional tax instead of claiming a refund.

If the employer's Form 16 doesn't support it, is this risky?

Looking for opinions from CAs or anyone who has dealt with a similar situation. Thanks!

Posted Jul 29, 2026, 6:42 AM UTC

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