20 July 2010
The Company paid arrear basic, HRA in 2010-11 relevant for 2009-10. At the same, arrear PTAX and PF had also deducted from their salary. Now, to compute benefit in section 89(1) in the year 2010-11, employer have certain doubts stated be low.
1. As a part of that benefit, tax liability of the employees are to be re-computed after considering the arrear in 2009-10 (accrual basis), to do so i) Can the benefit of section 10(13A) be given on arrear HRA if say one has unavailed portion of deduction (when rent paid is more than 10% of salary) 11) Can the benefit of arrear PTAX be given (off course the income component taken in gross)in the year 2009-10 and iii) Can arrear PF benefit be given in the year 2009-10?
20 July 2010
1.Calculate tax on the current year with and without arrears. Find the difference of tax and that is "A"
2. Find the last years tax with the arrears( As the tax of last year is already ready) and give additional deductions done in the current year find tax. Reduce the last years tax from this and that is "B" Now "A" minus "B" is your current year relief.
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