Query regarding relief u/s 89(1)

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 January 2012 I would like to know that when arrears of previous years(i.e. 2006-07, 2008-09, 2009-10) salaries are due in 2011-12 and such total arrears are received 40%, 30% and 30% in 2011-12, 2012-13, 2013-14 respectively. how would apply a tax treatment in 2011-12 when 40% is applied by assessee Department on total arrears, not on yearly basis i.e. not apply 40% on arrears of year 2006-07, 2008-09 and 2009-10?
Also Please tell me is there any clarification by CBDT?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

04 February 2012 Arrears are to be considered year-wise and only on receipt basis.
.
40% Amount is received means in each of the year you have to take 40% of Total arrears due.
.
Suppose arrears due for the 3 past years is
12000, 15000 and 20000.
The assessee gets 4800+6000+8000= 18800.
Consider 4800 in year 1, 6000 in year 2 and
8000 in year 3 respectively on receipt basis.
.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

04 February 2012 For clarification you may go through Rule 21A(2)(d)(i)& (ii).

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