i received arrears of salary for last 3 years. My company allowed relief u/s 89 (1) on part of the arrears in Form 16 by way of submitting 10E. Now i want claim remaining 89 (1) . is it possible? kindly let me know the procedure.
angshuman (ca final) (177 Points)
28 August 2011i received arrears of salary for last 3 years. My company allowed relief u/s 89 (1) on part of the arrears in Form 16 by way of submitting 10E. Now i want claim remaining 89 (1) . is it possible? kindly let me know the procedure.
Dintakurthi Tirumala
(CA FINAL)
(15994 Points)
Replied 05 September 2011
Yes, it is possible while ur submitting ur incometax return.
For claiming relief u/s89(1) the following steps has to be follow:
Camputation of relief u/s89(1):
1) First u compute incometax including arrears received for the current year(i.e. arrears received year)
2) Next u compute incometax excluding arrears received for the current year
3) Now find excess tax payable due to arrears from the above two steps (i.e. 3 = 1-2)
4) Next u compute income tax for the year to which the arrears related including arrears
5) Next u compute income tax for the year to which the arrears related excluding arrears
6) Now u compute how much tax payable due to arrears now from the above two steps(i.e.6 = 4-5)
7) Now u find difference between 3 & 6 i.e 7 = 3-4
Now get relief amount as per step 7 but limited to step 3 amount.
I think u follow the above if u want to get clarity please refer incometax reconer or incometax book with u it gives clear about computation with examples
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