89 relief on salary arrear

For accurate Section 89 relief:

1. Compute tax including arrears (current year total income)

2. Compute tax excluding arrears

3. • Recompute total income of those years

   • • With arrears

     • Without arrears

       Compute tax for each year:

        

     Allocate arrears to past years and:

4. Relief = Excess tax paid due to arrears

👉 While doing this:

• Use normal slab income

• Exclude incomes taxed at special rates from comparison impact

• Keep agricultural income consistent for rate purposes