Relief under section 89

Efiling 958 views 5 replies

Dhrunil Bhatt

Chartered Accountant

232 Points Joined July 2014

Dear Experts,

The assessee earns income under the head salary. The assessee employee left the company in the month of March 2016 and received compensation in the name of "Severance Allowance" (as mentioned in Form 16 issued for A.Y 2016-17). Relief under section 89 for the said amount was not shown by the employer in Form 16. However the employee has claimed relief under section 89 under the Act at the time of filing his return of income for the said assessment year.

CPC (Bangalore) disallowed the claim of relief [as shown in the intimation under section 143(1)] stating that Form 10E needs to be filed.

Kindly answer me following questions:

1. Whether the amount received in the name of "Severance Allowance" can be considered for the purpose of claiming relief under Section 89?

2. Whether relief under Section 89 be claimed inspite of the reason that the employer has not shown it in Form 16?

Kindly note that the amount is 3 to 4 times the amount of basic salary of the employee.

I would be grateful to you for your prompt response. Thanking You in advance.

Best Regards,

Dhrunil Bhatt

Replies (5)

Guest

CPC (Bangalore) disallowed the claim of relief [as shown in the intimation under section 143(1)] stating that Form 10E needs to be filed.

file 10E if it is part of salary and received later on then u may claim relief

sivaram

Asst Mgr-Taxation

6918 Points Joined April 2009

severence package is eligible for 89(1) relief if the employer has not calculated 89(1) relief it is left to the employee to compute the same and claim in his return might be the employer does not want to take pains to compute the same while giving form16 but ask employee to get it certified from employer and ask them to upload while filing their 24Q E RETURN ELSE return will not be processed by CPC which is not stated by the employer

Dhrunil Bhatt

Chartered Accountant

232 Points Joined July 2014

Respected Sivaram Sir,

The employee has already left the company in March 2016, and the company has already filed TDS Return in form 24Q.

Isnt it possible for the assessee employee to just file Form 10E and then rectify the return (as intimation has already been issued by the department).

Prompt reply would be appreciated.

Best Regards,

Dhrunil Bhatt

sivaram

Asst Mgr-Taxation

6918 Points Joined April 2009

it is not possible for employee to claim 89(1) relief unles it is reflected in Form 16 issued by the employer and e filing of Form 24q is also done by the employer where these relief is shown in the etds return