Releif u/s 89
This query is : Resolved
04 January 2011
Under this section relief is given when salary is paid in arrears or advance. Tax is computed on accrual and cash basis and if accrual is leeser than cash basis, that much is tax deduction.
04 January 2011
Dear Devendra,
As per S.89
Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanationto clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed.
So When Salary in Arrears is received and it gets taxed at higher rate , a relief computation can be made as Follows
Suppose
A)2003 Income Without Arrear salary 5,00,000
B)2003 Income With Arrear Salary 8,50,000,
C)2004 Income Without Arrear Salary 8,00,000
D)2004 Income With Arrear Salary 11,50,000
Now,We will Try To Locate tax Difference B/W A&B First then C&D and in both cases we will identify tax Component only on Arreared Salary. Then Relief u/s 89 Will be Difference in these two tax Components.
Regards
Ankit Gulgulia
As per S.89
Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanationto clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed.
So When Salary in Arrears is received and it gets taxed at higher rate , a relief computation can be made as Follows
Suppose
A)2003 Income Without Arrear salary 5,00,000
B)2003 Income With Arrear Salary 8,50,000,
C)2004 Income Without Arrear Salary 8,00,000
D)2004 Income With Arrear Salary 11,50,000
Now,We will Try To Locate tax Difference B/W A&B First then C&D and in both cases we will identify tax Component only on Arreared Salary. Then Relief u/s 89 Will be Difference in these two tax Components.
Regards
Ankit Gulgulia
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Transfer of Physical Stock Between Two Proprietorship Concerns
- EPF ECR NEW RULES Sep 17th 2026
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Taxation of crypto futures in India Fy 2026- 2027
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
