Is Leave Encashment Taxable As Salary?

It is taxable if received while in service. Leave encashment received at the time of retirement is exempt in the hands of the Government employee. In the hands of non-Government employee leave encashment will be exempt subject to the limit prescribed in this behalf under the Income-tax Law, according to Income Tax India Official website.

What is the taxability of ex-gratia received from employer?
If a person or his heir receives ex-gratia from Central govt/state govt/ local authority/Public Sector Undertaking due to injury to the person/death while on duty such ex-gratia payment will not be taxable.

What is the taxability of ex-gratia received from employer?
As per section 10(14) read with Rule 2BB Conveyance allowance is exempt to the extent of amount received or amount spent, whichever is less. For e.g., If amount received is Rs. 100 and amount spent is Rs. 80, then only Rs. 20 is taxable. However, if amount actually spent is Rs. 100; then nothing is taxable.

When relief under section 89 of the Income Tax Act is available?
Relief under section 89 is available to an individual if he has received the following given below:
Salary or family pension in arrears or in advance [Rule 21A (2)]
Gratuity in excess of exemption under section 10(10)(ii)/(iii) [Rule 21A(3)]
Compensation on termination of employment [Rule 21A(4)]
Commuted pension in excess of exemption under section 10(10A)(i) [ Rule 21A(5)]
In case of payment received other than above CBDT can allow relief under section 89 after examining each individual case. [Rule 21A (6)]

Are arrears of salary taxable?
Yes. However, the benefit of spread over of income to the years to which it relates to can be availed for lower incidence of tax. This is called as relief u/s 89 of the Income-tax Act.