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Discussion > Income Tax > Tax queries >

Section 89 (1) relief

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supervisor

[ Scorecard : 177]
Posted On 14 February 2010 at 12:26 Report Abuse

I received arrear of Rs.1,01,500/- arrrears during this financial year, but pertains to previous years  also.  Whether I should  give the details for 89(1) relief or it has to be given by the Accounts Officer?   Kindly let me know how to caclulate the relief for benefitting me.
 


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Amir
Learner

[ Scorecard : 3951]
Posted On 14 February 2010 at 13:06

Dear ramakrishnaraju,

U have to claim relief by Filling Form 10 E

For computation plz follow this link

 

http://www.raagvamdatt.com/Saving-tax-on-leave-encashment-amount-Section-89-1/220/



Total thanks : 2 times




Ramakrishnaraju
supervisor

[ Scorecard : 177]
Posted On 23 February 2010 at 10:59

Dear Mr.Amir

                         The link  which is talking about 89(1) relief on Leave Salary and not how to compute the 89(1 )relief.  Could u   share the information with dummy datas, it will be useful to me.  Further, In the Leave Salary on retirement or otherwise, I didn't understand is  how the leave salary earned can be bifuricated to the various years  and how is it possible to match the present salary by  which arrears got can be subsituted with the present salary  for the previous years in which his salary would have been less.




Amir
Learner

[ Scorecard : 3951]
Posted On 23 February 2010 at 11:20

Dear ramakrishnaraju,

It was just an example  for calculation purposes...U treat it as Simple arrears of salary...........




Ameet
L

[ Scorecard : 1668]
Posted On 23 February 2010 at 12:17

Computation of relief in case of relief when salary has been received in arrears or in advance under section 89(1) (in terms of section 89 read with rule 21A):

1. Calculate the tax payable on the total income, including the additional salary of the relevant previous year in which the same is received.
2. Calculate the tax payable on the total income, excluding the additional salary of the relevant previous year in which the same is received.
3. Find out the difference in tax at (1) and (2) above.
4. Compute the tax on the total income after excluding the additional salary in the previous year to which such salary relates.
5. Compute the tax on the total income after including the additional salary in the previous year to which such salary relates.
6. Find out the difference in tax at (4) and (5) above.
7. The excess of tax computed at (3) over the tax computed at (6) is the amount of relief admissible u/s 89(1). No relief is however admissible if the tax computed at (3) is less than the tax computed at (6). In such a case the assessee–employee need not apply for relief.




Ameet
L

[ Scorecard : 1668]
Posted On 23 February 2010 at 12:19

Computation of relief in case of relief when salary has been received in arrears or in advance under section 89(1) (in terms of section 89 read with rule 21A):

1. Calculate the tax payable on the total income, including the additional salary of the relevant previous year in which the same is received.
2. Calculate the tax payable on the total income, excluding the additional salary of the relevant previous year in which the same is received.
3. Find out the difference in tax at (1) and (2) above.
4. Compute the tax on the total income after excluding the additional salary in the previous year to which such salary relates.
5. Compute the tax on the total income after including the additional salary in the previous year to which such salary relates.
6. Find out the difference in tax at (4) and (5) above.
7. The excess of tax computed at (3) over the tax computed at (6) is the amount of relief admissible u/s 89(1). No relief is however admissible if the tax computed at (3) is less than the tax computed at (6). In such a case the assessee–employee need not apply for relief.




Ameet
L

[ Scorecard : 1668]
Posted On 23 February 2010 at 12:33

find the attached file, if u like

or one more is go through following link

http://gconnect.in/pages/it/section89.html



Attached File : 55 89 relief calculator updated as on 10 12 09.xls downloaded 467 times


C.A Alok Mukherjee
service

[ Scorecard : 450]
Posted On 06 March 2010 at 17:23

Can any body say me

1.whether PF on arrear salary also eligable to qualify relief in computing relief under section 89(1)?

2. whether pf on arrear is an eligable relief in normal 80C?




Amir
Learner

[ Scorecard : 3951]
Posted On 06 March 2010 at 17:33

Dear Sir,

Could not get ur question....

Employers share in PF contribution is not taxable if it is upto 12%........Employee's share is taxable (Deduction u/s 80C is available)  

An assesee has received arrears of Salary (say Basic), Now Employer will contribute 12% as his contribution & from those arrears 12% Employees contribution will be deducted........Ok

So, Relief can be claimed in respect of entire arrears(basic including employee contribution to PF)...The same will be eligible u/s 80C........

Now if u have something else, then plz ask....




venkatesh
Taxation

[ Scorecard : 48]
Posted On 26 March 2010 at 22:55

You have give the details to your Accounts officer in Form no.10 E  and ask for 89(1) relief

for calculating 89(1) download excel tool  from  http://89reliefcalc.blogspot.com/   and FAQ given will answer to all your questions



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