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Arrears and Sec 89(1), and deductions

ITR 278 views 2 replies

For FY 20-21 my employer was not able to pay full salary.

However, I was still investing for 80C and few other things throughout that year.

In FY 21-22, my employer paid the arrears (salary that belonged to previous year).

However, now that puts a huge amount in the 30q bracket for me.

I read that Form 10 Sec 89(1) can help with this.

 

For FY 20-21 ITR, I have mentioned what I have received along with the 80C deductions.

Will Form 10 Sec 89(1) help me such that I would be charged tax oj arrears as if I received it in the FY 20-21? Will it consider my deductions?

Or will I still have to pay tax as if I received all of it in FY21-22?

Replies (2)

As per Section 89(1), tax relief is provided by recalculating tax for the year in which arrears are received and the year to which the arrears pertain; and the taxes are adjusted in the year in which they were due. Note: Form 10E has to be filed before filing of the Income Tax Return. 

Tax is calculated on the taxpayer's total income earned or received during the year. If the assessee has received any portion of salary 'in arrears or in advance', or received a family pension in arrears, under the Income Tax Act it is allowed to claim tax relief under section 89(1).

Originally posted by : debora M
As per Section 89(1), tax relief is provided by recalculating tax for the year in which arrears are received and the year to which the arrears pertain; and the taxes are adjusted in the year in which they were due. Note: Form 10E has to be filed before filing of the Income Tax Return. 

Tax is calculated on the taxpayer's total income earned or received during the year. If the assessee has received any portion of salary 'in arrears or in advance', or received a family pension in arrears, under the Income Tax Act it is allowed to claim tax relief under section 89(1).

Thanks for your answer. But could you be more specific? I have already read my numerous articles before posting question here. They all said there will be a tax relief under sec 89(1).

However, will it consider by 80C investments for the previous year? Standard deductions and 80D?

Or will it just consider the tax slabs, preventing me from getting taxed 30% for all of the arrears?


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