Tax Implication on Salary Arrears of Late Person

Salary arrears received after an employee's death remain taxable through the legal representative and are not clubbed with spouse income.
Salary arrears relating to a deceased employee's service period ordinarily remain the deceased employee's income and are not automatically exempt because payment is received after death. Receipt by the surviving spouse as legal heir does not require clubbing with that spouse's salary income. Assessment should ordinarily be made through the legal representative. Year-wise allocation of arrears should be considered for salary-arrears relief, while any ex-gratia or death-related component requires separate tax treatment. (AI Summary)