Ashim kr Ray (social service) (1695 Points)
29 February 2016
Vishal Goel
(Chartered Accountant)
(1688 Points)
Replied 01 March 2016
Arrear of salary is taxable under section 89(1). Arrear is a portion of salary which is received for service done in previous years.
Tax can be easily calculate by following the simple steps mentioned below:
Step I: Calculate tax payable on total income including the additional salary (Arrear of salary) of relevant P.Y. in which it is received.
Step II: Calculate tax payable on total income excluding the additional salary of the relevant P.Y. in which it is received
Step III: Step I – Step II
Step IV: Compute tax on total income including the additional salary in the P.Y. to which such salary Relates.
Step V: Compute tax on total income excluding the additional salary in the P.Y. to which such salary relates
Step VI: Step IV – Step V
Step VII: (Relief) = Step III – Step VI
Step VIII: (Tax payable) = Step I – Step VII
Ashim kr Ray
(social service)
(1695 Points)
Replied 01 March 2016
thank you sir,
but one thing more does 10(e) is required to be taken from the employer.
CAclubindia
