RELIEF U/S 89(1)

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This discussion explores whether a government employee who received salary arrears for past financial years can claim tax relief on the Provident Fund (PF) contributions deducted from these arrears. The core question is whether the PF deduction can be spread across the relevant financial years for tax relief purposes under Section 89(1), or if it must be claimed only in the year the arrears were paid. The consensus suggests that unclaimed PF benefits from previous years can indeed be claimed in the year of payment, offering potential tax benefits.

Sowmya.S.Balan

Sowmya.S.Balan (Querist)
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28 May 2020 ASSESSEE, A GOVT.EMPLOYEE RECEIVED ARREARS OF SALARY FOR FY 2015-16, 2016-17, 2017-18, 2018-19 IN FINANCIAL YEAR 2019-20. PF OF 100000 IS DEDUCTED DIRECTLY BY THE TREASURY EACH YEAR. ASSESSEE HAS NOT CLAIMED ANY 80C DEDUCTION DURING THE RESPECTIVE YEARS WHILE FILING INCOME TAX RETURN. FOR 10 E CALCULATION , ARREARS OF PF CAN BE SPREAD OVER RESPECTIVE YEARS AND CLAIMED .IS IT POSSIBLE ? OR PF CAN CLAIMED IN THE YEAR OF PAYMENT ONLY ? IF POSSIBLE TO CLAIM IN THE YEAR OF PAYMENT ONLY, WHAT BENEFIT WILL GET TO ASSESSEE? ANY FAVOURABLE CASE LAWS

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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28 May 2020 1. Get the arrears breakup with respect to all the financial years. Since PF is contributed by the Organization and the employee, the monthly details of the PF amount of Rs.1.00 lakhs spread over the years can be availed

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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28 May 2020 2. And yes, the tax benefit on PF can be mentioned, spread over respective years and the benefits claimed.