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<h1>Section 89(1) Relief on Arrears, Advances, and Leave Salary Encashment Clarified; Retirement Leave Exempt Since 1978.</h1> Section 89(1) of the Income-tax Act, 1961, provides relief to taxpayers when salary is paid in arrears or in advance, or if the salary for more than 12 months is received in one financial year, leading to a higher tax rate. This relief is applicable upon application to the Income-tax Officer. The Central Board of Direct Taxes has clarified that this relief also applies to the encashment of leave salary while in service, as per rule 21A. However, leave encashment on retirement is already exempt under section 10(10AA) since April 1978.