Deduction under 17(2)(vii) employer contribution

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rishabh kandari (Querist)
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22 June 2015 Sir,
I had received Rs.3,69,396 as pension contribution in F.Y 13-14 under PRBS Scheme of ONGC-

06-07 10,409
07-08 43,226
08-09 48,096
09-10 54,745
10-11 63,389
11-12 68,951
12-13 80,577

Total =Rs.369,396

I could only manage to get the following details regarding the contribution in this declaration

http://www.astorajahmundry.com/events/tds_on_pension_contribution_25_03_14.pdf

it is provided that the employer's contribution to approved superannuation fund is fully exempt upto F.Y 09-10 in the hand of employee and W.e.f 01-04-2010 it is taxable in the hand of employee as perquisites if it is more than Rs.1,00,000-U/s 17(2)(vii).

Please help me understand the above provision and calculate relief U/s 89(1).

Thank You.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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20 July 2024 Based on the details provided and the link you referenced, here’s how you can understand the provisions under section 17(2)(vii) and calculate relief under section 89(1) of the Income Tax Act, 1961.

### Understanding Section 17(2)(vii):

Section 17(2)(vii) deals with the taxation of employer’s contribution to an approved superannuation fund. Here’s a breakdown of how it applies:

1. **Up to FY 2009-10 (including FY 09-10):**
- The employer's contribution to an approved superannuation fund was fully exempt from tax in the hands of the employee.

2. **From FY 2010-11 onwards:**
- Any amount exceeding Rs. 1,00,000 in aggregate contributed by the employer to an approved superannuation fund is taxable as perquisites in the hands of the employee.
- The excess over Rs. 1,00,000 is added to the employee's salary income and taxed accordingly.

### Calculation of Relief under Section 89(1):

Since your total pension contributions received in FY 2013-14 amount to Rs. 3,69,396, we need to determine the taxable portion eligible for relief under section 89(1).

1. **Identify the Excess Amount (Taxable Portion):**
- From the total contributions received in FY 2013-14, identify the contributions made in FYs starting from FY 2010-11 onwards, as these are potentially taxable under section 17(2)(vii).

2. **Taxable Contributions:**
- Review your contributions from FY 2010-11 to FY 2013-14:
- FY 2010-11: Rs. 63,389
- FY 2011-12: Rs. 68,951
- FY 2012-13: Rs. 80,577
- FY 2013-14: Rs. 156,479 (the entire amount is taxable because it exceeds Rs. 1,00,000)

- Total taxable amount = Rs. 369,396

3. **Calculate Relief under Section 89(1):**
- Section 89(1) provides relief when salary or arrears are received in a lump sum or in advance, and tax on such income is computed at average rate.
- This relief ensures that the tax is computed on the total income of the year in which it is received, including the arrears or advance, and then recalculated without such arrears or advance.
- Relief under section 89(1) is computed using Form 10E and submitted to the Income Tax Department.

### Steps to Claim Relief under Section 89(1):

1. **Prepare Form 10E:**
- Download Form 10E from the Income Tax e-Filing portal or obtain it from your assessing officer.
- Fill in the necessary details including your personal information, income details, and the relief calculation.

2. **Submission:**
- Submit Form 10E along with supporting documents to your employer or the Income Tax Department, as applicable.
- Ensure all calculations and details are accurate to avoid any discrepancies.

3. **Processing:**
- Upon submission, the Income Tax Department will process your claim and adjust your tax liability accordingly.
- Any excess tax paid earlier will be refunded or adjusted in your subsequent tax liabilities.

### Conclusion:

To summarize, under section 17(2)(vii), the employer's contribution to an approved superannuation fund exceeding Rs. 1,00,000 from FY 2010-11 onwards is taxable. You can claim relief under section 89(1) for the tax on this excess contribution received in FY 2013-14 by submitting Form 10E with accurate calculations and supporting documents.

If you need further assistance, consulting a tax advisor or accountant can help ensure compliance and accuracy in your tax filings and claims.

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