14 March 2008
Marginal relief is explained u/s 89(1) for receiving arrear salary
i had attaching one example here as follows ,
In case of Mr.X he receives salary for the previous year 2006-07 is Rs210000/ & arrear of salary received Rs50000 eligible besides he gives us the details of previous year salary:
14 March 2008
Compuation of Tax Payable on arrears of salary if charged to tax in the Respective assessment years : AY 2001-02 INC Arrears Exc Arrears Taxable Salary 60,000.00 60,000.00 Add:Arrear Salary10,000.00 0 Taxable Salary 70,000.00 60,000.00 Income tax thereon3,000.00 1,000.00 Add: Education cess360.00 - Total Tax Payable 3,360.00 1,000.00
14 March 2008
Increase in tax because inc of Arrear Salary 00 - 01 2360.00 01 - 02 3,060.00 30 - 04 5,250.00 Relief u/s 89 i). Tax Payable in A.Y 2007-08 on arrears Tax on income including Arrears 28,560.00 Less: Tax on income excluding arrears 17,340.00 11,220.00 ii). Tax Payable inrespective years on arrears Tax on total income including arrears 17,910.00 Less:tax on income excluding arrears 7,240.00 A.Y2007-08 & tax on arrear in respective years 550.00
14 March 2008
Tax payable for A.y 2007-08 after relief u/s 89 Incme tax payable on total income including arrear of salary 28,560.00 Less: Relief u/s 89 as computed above 550.00 Tax Payable after claiming relief 28,010.00
05 June 2014
Well I;m too late to respond to Mr. Arun's doubts. But Gayatri Ma'm (Hopefully ACA Gayatri at present) question asked was about the Marginal Relief. Marginal Relief is granted in case when there is inflationary impact on tax liability of an assessee due to surcharge, applied on Total Income which has exceeded marginally by Rs. 1 crore (Presently). And what u explained to him is Relief u/s 89(1).
CAclubindia
