An employee has received his salary for the previous year 2006-07 in the previous year 2007-08 . he did not eceived any salary for PY 2006-07 even though he rendered services for that year. Can he claim relief u/s 89(1) for the salary received in 2007-08, but pertaining to PY 2006-07?
2 Replies
Amir
(Learner)
(4016 Points)
Replied 04 January 2010
Dear Prakash,
Income Under Head Salary is taxable on "Receipt or Due - Whichever is earlier" basis...
Therefore if salary was due in 2006-07 but only payment was made in 2007-08, then salary of 2006-07 will be taxable in 06-07 itself..
Relief u/s 89(1) is available ONLY IN CASE OF ARREARS OR ADVANCE OF SALARY..
ARREARS :- It means that the salary though pertains to prior period BUT WAS NOT DUE IN THAT PERIOD AND HAS BECOME DUE AND PAYABLE IN THE CURRENT PERIOD...
Eg:- Increase in Salary with retrospective effect
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