Treatment of arrears pension fund contribution by employer (

This query is : Resolved

C Vinod (Querist)
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27 November 2014 Dear Expert,
I am working in a PSU. In FY 2013-14 my company revised the Pension scheme w.e.f 2007. And started Employer contribution @ 15% of basic+DA.w.e.f 2007. The company contributed this as arrears contribution in 2013-14 FY for 2007,2008 so on. And it taxed at the Hand of Employee during AY2014-15. But I heard that up to Rs.1 Lakh contribution by employer towards approved Pension fund is exempted. So can I Claim this deducted tax by filing a revised return now.Please clarify with relevant provisions.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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27 November 2014 In case of arrears are received retrospectively, Employees are eligible for rebate under section 89(1) of Income Tax Act, 1961.

Under Section 89(1) only differential tax required to be paid
For Example in 2007-08 employees had total income of Rs. 1,20,000/- on which Rs. 30,000 was paid as on tax
and
after taking arrears for the 2007-08 Rs. 20,000 (assume) received in financial year 2014-15.
The total income of Rs. 1,50,000/- on which tax is Rs. 35,000/-
Therefore only 5,000/- required to be paid

C Vinod

C Vinod (Querist)
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28 November 2014 Dear sir,
But in my case I am in same tax bracket for all this year. My specific query is that, My company had deducted the tax @30.09% rate at the hand of Employee, for the entire amount of Pension contribution by Employer(2007-08.2008-09 etc to 2013-14.This is without considering the Tax exception available for the Employer contribution towards approved Pension fund. My query is that can I claim this deducted tax back by filing a revised return? What is the form for this calculation? 10E cannot use for this purpose because it is just for differential tax. Your reply is awaited.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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28 November 2014
Even If Employer has wrongly deducted TDS without considering section 89 (1) you are still able to get refund of Excess Tax deducted by the employer.

For practicality of Section 89 (1) you don't need to file revised Return of Income. Claim can be made in present Return of Income.

Further if you are falling under same slab rate for the year, in that benefit of section 89(1) would not arise

Rupesh Jain

Rupesh Jain (Expert)
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29 November 2014 you can take section relief u/s 89(1)
you calculate the tax current year and take the income in related income.

and then if tax diff if come then you cannot take the relief.

if earlier year tax slab in lower than the current year then you take benefit otherwise not.

C Vinod

C Vinod (Querist)
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01 December 2014 Dear Expert,
I agree with you. In my case I am in the same tax bracket. So no chance of diff. tax. Now please see this. In Each Year from FY 2007-08 to 2013-14 do I am entitled for exemption of Rs.100000/- (contribution by Employer to the approved Pension fund) Year wise break up statement is given by my employer. But they taxed it in the contribution year(FY2013-14) as arrears. Now can please clarify, can I calculte the tax in each year with Rs. 1 Lakh exemption. In that case i am eligible for refund to the tune of 30% of 1 lakh each year? Please clarify.[Please note that the arrears is pension contribution by employer]