Are Leave Encashment, Gratuity, and Salary Revisions Taxable and Retroactive After Leaving a Job?

Income Tax on Leave Encashment, Gratuity, and Service Weightage

Can anybody tell me whether leave encashment, gratuity, and service weightage are covered under income tax or not? If yes, are there any conditions?

Entitlement to Salary Revision Post-Resignation

Secondly, is any employee entitled to an increase in salary revision after leaving an organization? The person left on 30th July; the hike in salary was supposed to be declared by the end of July but could not be due to some organizational reasons. The revision came in at the end of September but was effective from 1st July onwards. Is he entitled? If yes, then should the July salary, gratuity, and service weightage be recalculated, and should arrears of salary and gratuity be paid or not?

Request comments in this regard.

Regards,
pksagar

Eligibility for Salary Revision and Tax Implications

If the settlement does not confine the revision only to the employees existing in service as of the date of settlement, then the former employee will be eligible to receive it as arrears. Accordingly, the gratuity has to be reworked, and the difference paid.

Leave encashment is subject to income tax deduction like any other component of salary, whereas gratuity, subject to a maximum as provided in the Payment of Gratuity Act (Rs 10 lakhs), is not taxable. Any amount paid over and above it will be subject to tax.

Regards,
Madhu.T.K

Thank you, Madhu Ji, for your comments. The first part is not clear to me. Please elaborate. What is legally correct?