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Income tax on arrear payment

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I had got an arrear pension from epfo in the month of Sept 2024 . This arrear amount was for previous six years , now I am retired and submitting my returns regularly. At the time of releasing the arrear the epfo did not deduct income tax . Now after 7 months they are asking me to deposit the tax amount Rs 341000 in their account by DD . 

As the arrear amount is previous years also i want avail relief under section 89.

So can  I write to them that I will submit my return and avail relief of 89 and pay the balance tax to the tax authority directly, is it a good approch ? Kindly answer 

Prasanta Bordoloi 

Replies (4)

You should explain your situation clearly in the communication to EPFO, that you'll submit your return, avail relief under Section 89, and pay the balance tax to the tax authority directly sounds like a reasonable approach. Section 89 relief is applicable when you receive arrears of salary (or pension in this case) relating to earlier years. This can help reduce your tax liability in the year of receipt by considering the tax for those earlier years. 

Thank you very much sir , i have sent a letter to EPFO stating the points .

Thank you very much sir,   for your kind response. According to your wise advice , I have explained to the EPFO . And I have submitted my return of income tax and paid the balance tax to the income tax authority after availing releif of 89.

Thanks with regards

PRASANTA Bordoloi 

 

Sir, 

I have intimated to EPF that I have already submitted the e file for AS yr 2025-20 FY 2024-25 , taking the arrear amount as income and sent them the tax Challan No  .of tax payment and form 10 E, Form 89  etc and paid the tax for Rs191500

Now the pf is asking me to deposit the the amount as they have calculated for 341500 .

Now if I again pay the tax amount as they have calculated , there will be over payment of tax ie  ( over payment 341500) 

What should I do now . I am in great distress. Pl advice 


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