CA Harshal Totla
(Chartered Accountant)
(2229 Points)
Replied 24 June 2016
Arrears of salary received are taxable in the P.Y. in which it is received if such arrears of salary paid to employee in the previous year by an employer or a former employer, if not charged to income-tax for any earlier previous year. However, in other cases as per section 15 any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not is taxable in that P.y. only
CMA Poornima Madhava
(CMA)
(13097 Points)
Replied 24 June 2016
Harshal is right that arrears of salary are taxed in the year in which it is received. However, in general, salary is taxable on due or receipt basis, whichever is earlier.
CA shanky pahoja
(accountant)
(615 Points)
Replied 24 June 2016
salary is taxable on the basis of receipt or due which ever is earlier. but sometimes arrears are given due to retrospective increase in salary. in such cases it cannot be taxed in the year in the year it belongs to.
so such arrears are taxed in the year of receipt.
however benifit of releif u/sec. 89 is available.
CA Shrey Tripathi
(Proprietor at S I Tripathi & Co.)
(154 Points)
Replied 27 June 2016
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