section 89

step 1 Calculate tax payable on the total income, including additional salary – in the year it is received.

This figure can be taken from your Form 16.



Step 2 Calculate tax payable on the total income, excluding additional salary – in the year it is received.

You can get the amount of the additional salary (Arrears) from the arrear document given by your employer.



Now you have to subtract the arrear from the total salary received(including the arrears), which can be taken from your Form 16


After knowing the amount after arrear, you need to calculate the tax over the same.


Step 3 Calculate difference between Step 1 and Step 2

Step 4 Calculate tax payable on the total income of the year to which the arrears relate, excluding arrears

Step 5 Calculate tax payable on the total income of the year to which the arrears relate, including arrears

Step 6 Calculate difference between Step 4 and Step 5

Step 7 Excess of amount at Step 3 over Step 6 is the tax relief that shall be allowed.

Note that if amount at Step 6 is more than amount at Step 3 no relief shall be allowed.

I wanted to know how to calculate this if we income under other heads as well like some special incomes?

you need to calculate tax including salary arrear received in which it is received... then u need to identify the arrear means which year they are belongs and how much amount..after that u calculate the tax in that year if this arrear is received in that year ... this include GTI and arrear belongs to that year.. and difference between excess tax paid due to arrear and tax in which that arrear belongs..is relief ..