prakash r sahane (proprietor) (71 Points)
05 January 2010An employee has received 20 % of the arrears of sixth pay salary during the year 2009-10 the balance to be received in 4 equal instalments in the subsequent years. If the Totak Arrears are Rs 200000/- and he has received Rs 40000/- in 2009-10 , whether he can claim relief u/s 89(1). If Yes, How ?
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 05 January 2010
Dear Prakash,
The assessee can claim relief u/s 89(1) because he is pushed in the higher slab rate or may end up paying more tax because more than 12 months salary is being charged to tax.
Relief for arrears of salary is computed as below:- (rule 21A(2))
1.Calculate the tax payable on total income ,including the additional salary of the relevant previous year in which it is received.
2.Calculate the tax payable on total income,excluding the additional salary of the relevant previous year in which it is received.
3.Find out the difference between tax as calculated in step 1 and tax as calculated in step 2. (SAY A)
4.Compute the tax on total income after including the additional salary in the previous year to which it relates.
5.Compute the tax on total income after excluding the additional salary in the previous year to which it relates
6.Find out the difference between tax as calculate in step 4 and tax as calculated in step 5. (SAY B)
7.Relief = tax at step 3 - tax at step 6 (A-B)
Ashish M
(Chartered Accountant)
(2731 Points)
Replied 05 January 2010
Your Total Arrears is Rs.200000/-. in this yr. u received 20% ie. Rs.40000/-.
(1) For the purpose of Relief u/s 89(1). first include Rs. 40000 in this yrs. salary and calculate tax. Then calculate tax on this yrs. salary without including Rs.40000/-. find out the difference.
(2) After that include Rs.40000/- in the yrs. salary to which it relates. then calculate that yrs. salary without including this amount. find out the difference.
The excess of difference under (1) over difference under (2) will be the relief u/s 89(1).!!!!!!!!!!!!!!!!!!
Nishit
(Artical)
(21 Points)
Replied 19 February 2010
how will we calculate relief when we will receive the subsequent installments in A.y 10-11.
CA.KUNJAR SHAH
(CA in Practice)
(61 Points)
Replied 12 June 2010
How to relate the arrear to any particular year when one doesnt know for which year he or she has received it.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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