Yes, Arrears of Salary is always taxable.
When an employee receives arrears of salary for the previous years, which was not taxed earlier on the due basis, then the salary received is taxed on a receipt basis. However, one can claim relief under section 89(1) for arrears of salary or advance salary, if the Rate of tax on salary in the current year is more than the rate of tax on salary in a related year. You may opt for Assisted Filing in case you want our Tax Experts to calculate Relief u/s 89 for you.
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