If the net income of A.Y. 2019-20 exceeds Rs. 50 lac due to Arrear amount received during the previous year than surcharge amount can be considered or not at the time of calculation of relief u/s 89?
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Releif u/s 89
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1. You need to compute your tax liability 4 times for the 2 AY pertaining.
2. Compute tax liability including arrears salary (including surcharge) and tax liability excluding arrears. Determine the difference between these liabilities and consider that as A
3. Compute tax liability including arrears (including surcharge) in the year in which arrears relates and tax liability excluding arrears. Determine the difference between these liabilities and consider that as B
4. If A exceeds B then you will be eligible for relief u/s 89.
5. Remember, surcharge wherever applicable on the above income needs to be applied accordingly.
please correct me if the above solution has an alternative view.
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