Income tax on arrears


This query is : Resolved 

27 December 2008 sir
A govt. servant joined his service in Nov.2006. He has received his arrears this year as per the 6th pay comm. recommendatoins. since his total income for the year 2006-07 is less, can he show his arrears in his 2006-07 income to decrease his tax liability.

Thanking you
Rajinder Singh

27 December 2008 No. However,the arrears can be spread over to the respective years and tax relief,if a ny,can be claimed u/s 89(1) of the Income Tax Act,1961.

27 December 2008 He cannot do so. But Arrears can be spread to relating year and releif u/s 89(1) can be claimed.

27 December 2008 Intention of Querist is to reduce tax by treating arrears portion relating to previous FYs as being income of respective years.

Most probably he will get substantial relief because he earned salary for only few months in FY 2006-07.

I would therefore suggest the Querist to contact any local CA with figures for relief u/s 89


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