Step 1 Calculate tax payable on the total income, including additional salary – in the year it is received
Step 2 Calculate tax payable on the total income, excluding additional salary – in the year it is received
Step 3 Calculate difference between Step 1 and Step 2
Step 4 Calculate tax payable on the total income of the year to which the arrears relate, excluding arrears
Step 5 Calculate tax payable on the total income of the year to which the arrears relate, including arrears
Step 6 Calculate difference between Step 4 and Step 5
Step 7 Excess of amount at Step 3 over Step 6 is the tax relief that shall be allowed.
Note that if amount at Step 6 is more than amount at Step 3 no relief shall be allowed.
Filing Form 10E is mandatory to claim Relief under section 89(1)
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