Chartered Accountant
4 Points
Joined July 2010
It is taxable as clause (c) of Section 15 of Income tax act provides that arrears of salary is also taxable in the year in which received or allowed. However, employee can get tax releif under Section 89 as due to receipt of arrear of salary his slab rate get increased (for Assessment Year). For this employees needs to provide working of tax of earlier year as per Rule 21AA of Income tax rules and needs to submit Form No. 10E along with his return. It is to be noted that as all return is now in electrnic mode, hence this form will also submiited electronically.
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