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Tax on receipts of arrear faimly pension

jatin uniyal (@@@@@@) (47 Points)

25 September 2011

a person received arrear amount of faimly pension for last 5 previous years with current previous year's(2010-11) pension , in which bank has been deducted tax at receipts basis(in total amount of 6 year's pension). can this person claim relief from tax for previous year's pension income ? if u know relevant sec. for this purpose kindly suggest applicable sec.

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7 Replies

CA Shriniwas Khadloya (Practicing CA) (41 Points)
Replied 25 September 2011

Dear Jatin

you can claim relief U/S 89 of the income tax act.

excess TDS deducted will cliamed as refund in the return of income

CA Shriniwas KHadloya

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Section 89. Relief when salary, etc., is paid in arrears or in advance.

Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature

of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed.

Relief u/s 89 is available only if pension is charged under the head salary.

In your case it is the family pension which I is given after the death of the employee. Family pension is charged under the head Income from Other Sources. Therefore no relief.

But one thing can be done. Income from other sources is computed as per the books of accounts maintained by the assessee. In this case if accounts are maintained on accrual basis then pension will be taxable in each year separately. Therefore question of relief do not arises.

Thanks

https://taxbykk.blogspot.com/

CA Shriniwas Khadloya (Practicing CA) (41 Points)
Replied 26 September 2011

Read the foolowing Pro. to Income Tax Act

U/S 89 RELIEF FROM INCOME TAX PAYABLE WHEN SALARY/FAMILY PENSION/GRATUITY PAID IN ARREARS/ADVANCE

Any Assessee in receipt of any kind of salary or profits in lieu of salary or family pension or gratuity, which is received in arrears or in advance able to claim relief

Relevant Condition.

The assessee’s total income due to receipt of such arrears or advance gets assessed at a rate higher than that at which it would otherwise have been assessed.
The assessee being a government servant or an employee in a company, co-operative society, local authority, university, institution, association who is entitled to claim relief u/s. 89, may furnish to his employer, the particulars specified in Form 10E. The employer in such case shall compute the relief u/s. 89 on the basis of such particulars and take it into account while deducting TDS [vide section 192(2A)]
As per Circular No. 431 dated 12-9-1985 [156 ITR (st.) 82], the relief u/s. 89 shall be admissible in respect of encashment of leave salary by an employee when in service.
The relief is to be given in the assessment in which the extra payment by way of arrears, advance etc., is taxed.
In order to claim relief, the assessee should send an application to concerned assessing officer on plain paper.