Exemption and Taxability of Leave Encashment

Every salaried person as per labour law is entitled to a minimum number of paid leave every year. However, it is not necessary that an individual employee utilises all the leave he is entitled for a year. In fact, most employers allow the employees an option of carrying forward such unutilised paid leaves.

source https://www.caclubindia.com/articles/exemption-and-taxability-of-leave-encashment-47123.asp