How to Claim Income Tax Benefit on 11th BPS Arrears Payment ?

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Thursday, 7 January 2021

How to Claim Income Tax Benefit on 11th BPS Arrears Payment ?

Know the steps to calculate and get the Income tax benefit on arrears payment using 89 (1) Relief Calculator in Excel – Every time whenever the bipartite arrears of salary or allowances are paid, the Income tax is deducted in the current financial year without considering the previous financial years. 

As per the Income Tax guidelines, Income tax will be deducted on the arrears payment,  whether it pertains to salary of previous year or current year, the amount should be included while computing total income for the current financial year. 

But the Income Tax is also providing relief on the arrears payment where employees can be given relief under section 89 (1) to Income Tax department after submitting the Form 10 (E) with Income Tax Return of the payment year. In case of 11th BPS FY 2020-21 is the base year for submission of form 10 (E).

How to Compute using Income Tax 89 (1) Relief Calculator?

  1. Calculate the Income tax payable on the total Income including the arrears or allowances paid for the current year.
  2. Calculate the tax payable on the total income excluding the additional salary relating to the previous years.
  3. Find out the difference between above two.
  4. Compute the Income Tax of previous years after including the arrears
  5. Find out the difference between the tax payable and already paid

In order to make it easier,  there is an excel based calculator to calculate the relief u/s 89 (1). Just download or calculate online.

Also Calculate - Check - Whether the Credited Arrears by Your Bank, Correct or Not ?

NOTE : This website nor the author take any responsibility of data filled by You. We suggest you to take the advise from the expert or Income Tax department after filling the details and before claiming tax benefit.

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