ARREARS RECEIVED OF INCOME FOR YEARS WHERE NO INCOMETAX RETURN WAS MADE

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This discussion addresses how to claim a tax rebate under Section 89(1) for arrears received in the current financial year, even when income tax returns were not filed for the years the arrears relate to. The primary concern is whether the tax department will accept such a claim without previous ITRs and how to correctly declare the arrears when filing the return for the current year.

Arun Kumar M

Arun Kumar M (Querist)
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20 November 2021 Dear All,

One of my relative is a teacher in AIDED school. She was appointed in 2011 and got confirmed in 2015. As there was nominal income during FY 2011 to 2015, no return was filed. Now in 2021, she is having Taxable income of around 8.21 lakhs and FY 2020-2021 she was given an arrear of Rs 1,50,000/- for 2011 to 2013.
In this case how can we calculte Rebate u 89(1).

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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20 November 2021 You may claim arrears based on her bank statements, but department do not accept such claim when the previous ITRs are not filed.

Arun Kumar M

Arun Kumar M (Querist)
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20 November 2021 Thank you sir, I plan to tell her to take full amount (including arrears) as FY 2020-2021 income as TDS deducted as per that amount. Only concern is FORM 16 shows arrears separately and while filing return will we have to show it separately too?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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20 November 2021 No. The arrears are also assessed under salary itself.

Arun Kumar M

Arun Kumar M (Querist)
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20 November 2021 Sir, while calculating rebate 89(1), it seems the tds deducted amount in FY 202-21 is fully seen as relief. Hope it will be right as Income for 2011-20129 Rs Twenty Eight thusand, 2012-13 9 Rs Ninety one Eight Hundred and FY 2013-2014 Rs Thirty Three thousand - is received in FY 2020-21 and all these FY's she has not filed returns as no income was there. With this 152800, her taxable income is Rs Five Lakh seventy one Eight twenty for which 27939 TDS was deducted and paid by employer. So, if we show arrears while filing return with 10 E, i hope all this TDS will be refunded under relief 89(1). Is it correct?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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20 November 2021 Yes, if the department accepts the relief claim, without previous ITRs.

Arun Kumar M

Arun Kumar M (Querist)
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20 November 2021 Thank you sir, Very helpful.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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20 November 2021 Most Welcome .. & Good Luck ........

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