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Salary - Arrears Tax Calculation -Big Problem

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Pankaj

Manager

223 Points Posted on 23 January 2010

Hi.........

This is pankaj.

I have a problem.

If ABC ( Govt. Dept) is employer of XYZ .As per 6th pay comm., State Govt has declared arrears for 4 years of Rs 100000/- in F Y 09-10. But in F Y 09-10 State Govt has transferred only 20% of total amt , means Rs 20000/- to GPF A/c of the Mr XYZ. & other remaining amount will be transferred to GPF A/c as following :

In F Y 10-11 Rs 20000/- , F Y 11 -12 Rs 60000/-

So, in the above case , Which arrears amount should consider for tax calculation in F Y 09-10? Rs 20000/- or 100000/-

Please anyone explain me...............

Thanks

Replies (5)

Ramya Kinthali

Financial Consultant

134 Points Posted on 23 January 2010

if arrears salary r declared to gov employee as per 6th pay commission recpmmendations...those arrear salaries must be considered on payment basis...

so in given prob only 20000 is considered for taxation in current AY.. remaining r considered in the year in which they r paid

this is as per circular.

swajitha

ca..final

71 Points Posted on 23 January 2010

according to the circular i m sure that tds under sec 192 will be deducted on payment basis....can anyone clarify abt the taxability of the arrears of salary in this case