Sick, unpaid, and unpaid leave are often separated into these three categories among salaried employees in the working population. Employees can use their vacation balance or accrued time when they retire or leave their job, so it is not necessary to take advantage of these accrued leaves. Vacation pay guidelines and policies vary from one company to the next. Although the general rule is that leave balances are redeemable upon retirement or resignation, company policies regarding full and final payment of leave pay may differ. holiday. However, all leave taken while working is fully taxable. However, under section 89 of the Income Tax Act, it is possible to claim exemption from the holiday. For employees in the Central or State Government sector, the leave payment granted at the time of retirement or resignation is fully satisfied. In addition, non-government workers who receive the leave are not partially exempt. Let’s take a brief look from industry experts on how and when to pay taxes.