Online tool to calculate Rebate under Section 89(1)

Tagged with: section 89 rebate for arrears

Saturday, November 14, 2009

This article is posted in Income Tax category and has 71 Comments so far.

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We have come up with an online tool for calculating rebate under Section 89(1) of Income Tax Act for Second Installment of Sixth Pay Commissioner Arrears. This Calculator would get you the exact Income tax exemption while distributing the arrears amount to previous years in which the enhanced salary is actually payable. You can also generate the statutory form known as Form 10E with the calculation and the rebate available to you. This Form 10E has to be submitted to your employer as well as the Income Tax Department along with the photo copies of IT returns or Form 16 relevant to the previous years.

Who could really get substantial benefit out of the rebate granted under Section 89(1) of Income Tax Act, this time ? ( This is only an analysis. We recommend everybody to try this calculation)

1. Those who were well within the exemption limit during the previous years ie., Net Taxable Income within Rs.1 lakh during the year 2005-06 and 2006-07.

2. Those who did not claim rebate under Section 89(1) for the First Installment of Sixth Pay Commission Arrears.

3. Those who have Net Taxable income more than Rs. 3 lakh this year (2009-10).

Go to Online Calculation Page for Rebate under Section 89(1) for Second Installment of 6CPC

You can save the Form 10E after you generate the same as html document for future use. You can also take a print out after you generate the same.

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71 Responses to “Online tool to calculate Rebate under Section 89(1)”

Krishnan said on Sunday, November 15, 2009, 21:22

Please include the income tax, 89(1)calculator for Senior citizens also
Thanks
V.krishnan

Reply
M.G.MURUGAN said on Monday, November 16, 2009, 16:54

Kindly inform how to calculate 2A,3A, 2B, 3B etc. as these are calculated by account section and we only aware by the statement issued. If possible can you include a calculoator to do the same based on basic, grade pay etc ?

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KARAM CHAND BHAMBHU said on Monday, November 16, 2009, 20:02

FOR 2008-09, THE ARRS.(40%) PERTAINING TO 2008-09 IS ALREADY INCLUDED AS PART OF INCOME FOR 2008-09. SO , ONLY THE 60% PART OF THE ARRS. PERTAINING TO 2008-09 SHOULD BE ADDED FOR 2008-09 IN CASE THE RELIEF U/S 89(1)
WAS AVLED. IN 2008-09.

Reply
admin said on Tuesday, November 17, 2009, 7:09

@Karam Chand,
AS per Section 89(1), total taxable income during the previous years has to be taken into account for calculating relief for this year. The arrears received during previous is any way an income during previous years. Hence, 40% arrears should be distributed in 05-06, 06-07 07-08 and 08-09 if you had claimed relief last year. Other wise entire 40% has to be shown as income in 08-09

Reply
KARAM CHAND BHAMBHU said on Tuesday, November 17, 2009, 13:09

1. TO GIVE CORRECT “TAX ON TOTAL NET TAXABLE INCM.-COL.-5″ IN THE TABLE”A” THE 40% ARRS. IN R/O THE CONCERNED YEARS(2005-6,2006-7,2007-8) HAS TO BE ADDED TO THE TOTAL NET TAXABLE INCMS. SHOWN IN FORMS-16 AND THIS AMOUNT BE SHOWN IN 1A,1B,1C RESPECTIVELY. FOR THE YEAR 2008-09, AMOUNT SHOWN IN FORM-16 ALREADY INCD. THE ENTIRE 40% ARRS. AS SUCH THE AMOUNT TO BE SHOWN IN “1D” SHOULD BE THE AMOUNT(NET TAXABLE) AS PER THE FORM-16 “LESS” THE 40% ARRS IN R/O YEARS 2005-6,2006-7,2007-8 ONLY.
2.FOR THOSE WHO HAD NOT AVLD. SEC.89(1) IN 2008-09:-
ALL THE FIGURES IN 2A,2B,2C,2D HAS TO BE “0″. AND THE AMOUNT AS PER FORM-16 OF 2008-09(TOTAL NET TAXABLE INCM.) SHOULD BE SHOWN IN “1D” ITSELF FOR YR. 2008-09 TO CORRECTLY WORKOUT THE TAX IN TABLE”A”
NOTE: ABOVE WILL GIVE THE CORRECT AMOUNT OF TAX IN TABLE”A” .

Reply
admin Reply:
November 17th, 2009 at 7:18 pm
@Karam Chand
ya that is why the col 1D has been worded as follows

1D Enter Net Taxable Income for 2008-09 without including 40% arrears received

Reply
Madhavan said on Tuesday, November 17, 2009, 22:19

I believe Calculate the following seperately
a) (Income Tax for FY 2009-10 including 60 % arrears) & CESS thereon
b) (Income Tax for FY 2009-10 w/o arrears ) & CESS thereon.
c) For Each previous FY (2005-06 ie Jan 2006 onwards, up to 2008-09 ie Aug 08)
Sum of IT paid previously (including CESS thereon) for FY 05-06 to 08-09.
d) Same as (c), but including respective arrears portion added to Income & IT recalculated with respective years CESS and are added together for (FY 05-06 to 08-09)

REMEMBER — I recommend to add CESS respectively in a,), b), c) & d).

Now., Amount of Relief u/s 89 = (a + c) – (b + d).

Reply
admin Reply:
November 19th, 2009 at 2:21 pm
@Madavan
Cess has been taken into account in the simplified tool launched now. Pl check

A- Tax for income with total arrears received during this year
B – Tax for income this year without arrears
C – Total of IT payable in the previous years on total income after including the portion of arrears relevant to the concerned years
D- Total of IT payable in the previous years without including the arrears that received during this year

Now relief amount for the arrears received this year= (A-B)-(C-D)

Reply
Vino Anand said on Tuesday, November 17, 2009, 23:34

This relief calculation may also be updated online and the same may be carry forward in the IT Calculation.

Reply
V K Singh said on Wednesday, November 18, 2009, 11:23

In the calculation education surcharge is not taken care please correct calculator accordingly.

Reply
raj gupta said on Wednesday, November 18, 2009, 11:54

Your software for calculation of 10 e is very good but education cess in not included in income tax calculation please verify

Reply
admin Reply:
November 19th, 2009 at 1:57 pm
In the simplified tool launched now it is included. Pl check up

Reply
S. Sivaprahasam said on Wednesday, November 18, 2009, 16:25

I think SC and Education Cess on IT have not been included in the calculation. Please clarify whether SC and Education are payable only for the net amount.

Reply
Ch. Narasimha Chari said on Wednesday, November 18, 2009, 16:55

Sir,
I haven’t claimed any relief under section 89 for the year 2008-09 for the amount 40 % arrears received in year 2008-09.
As per 2D, we have to enter the 40% arrears amount of we have not claimed under section 89(1).
But I have paid tax for the amount includeing arrears. If we enter the amount received in this column, then tax will be calculated twice.Hence as given in columns 2A, 2B,2C this column should be filled as 0 instead of received arrears amount. I ahve this confusion. Please clarify me rgarding this.

Reply
admin Reply:
November 19th, 2009 at 6:47 am
@ Shri.Narasimha Chari
For 2008-09, you have to give three inputs.
1. Net taxable income for 2008-09 (without including the 40% pay arrears for 2008-09. Say if you received 6cpc pay on sep -08, 40% arrears for this year is from Mar-08 to aug-08).
2. 40% arrears for 2008-09 (Since 40% arrears for 2008-09 is not included above, it has to be shown here.

3. 60% arrears for 2008-09

Reply
Gyan Ranjan Mishra said on Wednesday, November 18, 2009, 21:20

Used your online calculator for tax rebate under section 89(1), nice one. I had my entire salary and 6CPC Arrear data. I received only 26% of the arrear in 2008-09 and 74% of the arrear in 2009-10 along with some salary arrear pertaining to the period 2008-09 in 2009-10. a) Should 74 % of the the individual year wise arrear be taken as prop arrear for that year? b) Should the entire salary arrear for the period of 2008-09 received in 2009-10 be taken along with a) above, for calculation under the financial year 2008-09 ? c) The IT slab for financial yr 2006-07 used in the calculator is nil up to Rs 1,00,000 for male. Kindly confirm whether it was Rs 1,00,000 or Rs 1,10,000?
Thanks.

Reply
Gyan Ranjan Mishra said on Thursday, November 19, 2009, 7:54

I would request admin to study my case and reply once again. My salary was fixed in a lower GP and Pay Band from Oct 2008 and re fixed appropriately in Apr 2009. Hence I received only 26% of the 6CPC arrears (Jan 2006-Aug 2008) in financial year 2008-09. Also I received 74% of the 6CPC arrears (Jan 2006-Aug 2008) in financial year 2009-10 and salary arrears (Sept 2008-Mar 2009) in financial year 2009-10. I have obtained year wise breakup of total arrears.
a) Should 74 % of the the individual year wise breakup of total arrears be taken as prop arrears for that year(instead of 60%)?
b) Should the entire salary arrears(Sept 2008-Mar 2009) received in 2009-10 be taken along with a) above (as this is 100% of the salary arrears of previous financial year), for calculation under the financial year 2008-09 ?
c) The IT slab for financial yr 2006-07 used in the calculator is nil up to Rs 1,00,000 for male. Kindly confirm whether it was Rs 1,00,000 or Rs 1,10,000?
Thanks.

Reply
admin Reply:
November 23rd, 2009 at 9:21 am
@Gyan Ranjan Mishra
a) whatever the salary income received during this year whether it is meant for current year or not should form part of your taxable income this year. However you could distribute the arrears received to the past years to work out your relief for arrears under Section 89(1). So in your case mentioned in a) of your query, 74% of total arrears receivable each year has to be accounted.
b) for your query in b) entire salary arrears for sep-to feb 2009 has to be accounted in 2008-09 as far as relief calculation is concerned if you have received the same this year and showing the same as arrears in tax calculation this year

Reply
trs manickam said on Thursday, November 19, 2009, 19:53

I want clarifications on 1) whether children education allowance (CEA) is fully exempted from income tax? 2) CEA for 2008-09 was paid in April 2009 and CEA for 2009-10 is claimed in II nd quarter of 2009-10. Is two CEA claims made for different financial year but paid in one financial year exempted from Income tax ? (since both claims added together exceeds Rs.24000/- in one year)

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KARAM CHAND BHAMBHU said on Saturday, November 21, 2009, 1:27

ED.CESS IS PAYABLE ONLY ON NET TAX AFTER ALL KIND OF RELIEF.
AS SUCH ONLY THE INCM.TAX HAS TO BE CALCULATED FOR ALLOWANCE OF THE RELIEF. OTHREWISE THE AMOUNT OF RELIEF WILL BECOME INFLATED?
THANKS

Reply
Manish said on Tuesday, November 24, 2009, 10:55

I am a employee of CSIR (an autonomous body). Apart from the job i am doing part time m.tech. so I want to know weather I got income tax benefit on my m.tech. fee which is approx. 21000/- per annum or not.

Reply
raj gupta said on Thursday, November 26, 2009, 12:22

kindly let me know how to calculate HRA? I give Rs. 4,000/- P.M. rent and receive 20% HRA from my office (Central Govt). My basic salary is 15000+ Grade pay 4200

Reply
admin Reply:
November 26th, 2009 at 1:11 pm
@ Raj Gupta
Please go through this article to know about Income tax on HRA
http://gconnect.in/gc/service/personal-income-tax/incomeloss-from-house-property.html

Reply
KARAM CHAND BHAMBHU said on Thursday, November 26, 2009, 22:30

I CHECKED UR PROGM./CACL. FOR RELF. U/S 89(1) FOR THOSE WHO HAVE AVLD. THE BENEFIT LAST YEAR ALSO. THE CACULATOR DO NOT GIVE THE CORRECT FIGURES IN TABLE”A”. 1) COL.-2 IN TABLE-A MUST INCLD THE 40% ARR. FOR THE CONCERNED YEARS . AND THE TAX IN COL.-5 IN TABLE-A SHOULD BE BASED ON THIS;WHICH SHALL BE THE FIGRS. IN COL-6 OF LAST YEAR TABLE-A9 FOR 2005-6,2006-7,2007-8)
2) THE FIGR. FOR 2008-09 SHOULD BE THE FIGR. AS PER FORM-16 LESS “THE 40% ARRS. IN R/O 2005-6,2006-7,2007-8 ONLY”
3) FOR THE CAL. OF RELF. ONLY THE TAX HAS TO BE TAKEN INTO ACCOUNT; THE CESS SHALL BE COMPUTED ONLY AFTER THE RELIEF, THAT IS ON NET I.TAX PAYABLE THIS YEAR ONLY .

Reply
admin Reply:
November 27th, 2009 at 2:57 pm
@Karam Chand Bhambhu
For those who have availed section 89(1) last year, the actual tax paid by them last year (after deducting relief availed by them last year) has been worked out based on 40% or other arrears paid last year but due in the past years. This tax for the year 2008-09 excluding section 89(1) has been taken into account for calculating relief in respect of 60% or other arrears paid this year (2009-10). You can see in the year 2008-09 entire 40% arrears have been added and taxes after deducting seciton 89(1) relief have been calculated in the case of persons availed section 89(1) last year. For those who did not avail section 89 relief last year also entire 40% arrears have been added and taxes without deducting relief has been workded out. Hence, there is no need to include the portion of 40% arrears in the year 2005-06, 2006-07 and 2007-09.

Reply
A.K.SINGH CUTTACK said on Friday, November 27, 2009, 20:59

VERY TYPICAL CALCULATION

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Lalit said on Monday, November 30, 2009, 16:30

In case I opt for taking benfit of Sec 89(1), will I have to revise and file revised return for all the years for which the 6CPC arrear pertains.

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Subhajit sengupta said on Monday, November 30, 2009, 20:47

I haven’t claimed any relief under section 89 for the year 2008-09 for the amount 40 % arrears received in year 2008-09.As per 2D, we have to enter the 40% arrears amount of we have not claimed under section 89(1).But I have paid tax for the amount includeing arrears.

I want to claim relief under section 89 for the year 2009-10 for the amount 60 % arrears received in year 2009-10.

Reply
admin Reply:
November 30th, 2009 at 10:25 pm
@Subhajit Sengupta
If you have not claimed relief last year, keep the tick box blank and start entering your values. The distribution of 40% arrears to the previous years is automatically disabled. Since you had received the said arrears in 2008-09, it’s an income for you in that year. So your income for 2008-09 should be inclusive of 40% arrears. Then distribute 60% arrears to the relevant years, which will provide you a relief if your income inclusive of total 60% arrears this year is more than the difference in taxes due to distribution of arrears to previous years.

Reply
Subhajit sengupta said on Wednesday, December 2, 2009, 23:11

Thanks for my reply

I am Central Govt employee , As per your reply I want to claim relief under section 89 for the year 2009-10 for the amount 60 % arrears received in year 2009-10. but our office refused to accept my claims due to non-availability of any latest circular issued by the income tax department.

I am requesting that
a)If possible please mention whether any official circular issued by the income tax department issued or not , If not, then they will accept it or not my claim relief under section 89 for the year 2009-10 for the amount 60 % arrears received in year 2009-10.

b) If any Central Government organisation already accept this type of claims , please mention the name and the address of the organisation.

c) If possible , any Income tax official please inform at Kolkata where I get the detailed information regarding this matter at the earliest.

d) Please mention any official site of Income tax Department where i can send my query.

Reply
admin Reply:
December 3rd, 2009 at 10:20 am
Check these Income tax web pages for details about section 89(1). These are all Government website links. You can refer these to your employer

http://law.incometaxindia.gov.in/TaxmannDit/DispCitation/ShowCit.aspx?fn=http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/section89.htm

http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/ftn46section88.htm

http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/Rules021a.htm

http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/Rules021aa.htm

Reply
K C RAYANE said on Friday, December 4, 2009, 22:17

Sir, In your reply dated 17/11/2009 to karamchand remark as follows
“ya that is why the col ID has been worded as follws= ENTER NET TAXABLE INCOME FOR 2008-2009 WITHOUT INCLUDING 40% ARREARS RECEIVE ”

But in the calculator it has been worded as ENTER NET TAXABLE INCOME FOR 2008-2009 INCLUDING 40% ARRERS

Kindly clarify

yours sincerely,

Reply
admin Reply:
December 5th, 2009 at 9:00 am
@Rayane
sorry for the past comment of admin referred by you that is slightly misleading in the present scenario. The fact is this comment was given when the tool was published earlier without the facility of calculating the relief claimed by a user during the last year (2008-09) for the 40% arrears, for the purpose of working out actual tax paid by the user last year (after claiming relief). Now this issue is sorted out and further the tool is simplified and the number of fields in which you have to give your input has been reduced. That is why in one of the fields has been worded as “ENTER NET TAXABLE INCOME FOR 2008-2009 INCLUDING 40% ARREARS”

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RATTAN said on Wednesday, December 16, 2009, 21:33

Calculator should also cater for senior citizens. Thanks.

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sanjay kumar said on Wednesday, December 16, 2009, 23:18

please reply to trs manickam said on Thursday, November 19, 2009, 19:53, as this is concerned to most of the central govt. employees who want to avail this relief under IT rule.

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admin said on Thursday, December 17, 2009, 9:35

@manikam and @ sanjay kumar
1) children education allowance (CEA) is not exempted from income tax? However, tuition fees paid whether claimed as CEA or not could be deducted under Section 80 C (it has a cap of Rs.1 lakh)
(2) If you have received CEA for last year during this year, the same is to be included as income during this year

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RATTAN said on Thursday, December 17, 2009, 21:31

I think calculator does not cater for senior citizens for relief under sec. 89(1). Under category, it is mentioned only male/female and not S as said. Pl. advise as how to proceed for seniors.

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mdst said on Thursday, December 24, 2009, 22:02

How will this calculator work for calculating rebate under section 89(1) in case of Kendriya Vidyalaya teachers wherein only 40% arrear have been paid in the current year and the balance 60% arrears have not been paid.

Reply
admin Reply:
December 28th, 2009 at 2:59 pm
@mdst
This calculator can be used calculating relief for receipt of 40% arrears this year, as follows

1. Do not tick the box provided on the top, since you did no receive any arrears last year.
2. Enter 40% arrears in the field provided for 60% arrears/other arrears received during this year. Also ignore the description provided for the year 2008–09 as taxable income inclusive of 40% arrears. Enter the taxable income without arrears in the said field as you did not receive 40% arrears during last year. Now the calculator should work well for you

Reply
Ashok Chander Kumar said on Friday, December 25, 2009, 16:52

Please
provide a tool for calculation relief under section 89(1) for senior citizens.

Reply
sanjay kumar said on Thursday, January 7, 2010, 13:32

i would like to draw attention of admin. that unde the tool, the rebate, which is worked out by the tool is inclusive of education cess and the same, as whole can not be claimed as relief. the relief in IT should be worked out as under:-
relief worked out by tool/1.03(e.g. if relief is worked out by the tool is Rs. 2650 then the actual relief in IT should be=2650/1.03=2572.82. please comment whether i am correct?

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sanjay kumar said on Thursday, January 7, 2010, 22:11

i think IT relief should be equal to the amoumt worked by the tool and devided by 1.03 as the tool work out inclusive of education cess.

Reply
admin Reply:
January 8th, 2010 at 3:22 pm
@sanjay kumar
You can see that in the Income tax calculation tool, relief would have been deducted after cess is worked out for the total tax payable. This is what income tax dept’s illustration for income tax calculation says. You can also verify this through ITR-1 and ITR-2 format issued by the income tax dept

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Nirvan Das said on Monday, January 11, 2010, 20:26

I have developed an MSExcel file programmed with easy calculation of rebate u/s 89(1) and automatic preparation of 10E form along with its 2 annexures for central govt employees. If needed for free, request to nirvandas@rediffmail.com or phone 09732565772. It will require 2 figures each from Form 16 for last 4 years, gross break-up figure for each year of total 60% arrear, gross total income (total income-professional tax-HBA interest) and taxable income for current year 2009-10.

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P J MANI SR.DFM/O/UBL said on Thursday, January 14, 2010, 15:47

WONDERFUL PROGRAMME THANK YOU VERY MUCH

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Satyanarayana Murthy said on Thursday, January 21, 2010, 11:29

The calculation sheet cannot be used if the assessee is a senior citizen.

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KETHARAM said on Friday, January 22, 2010, 15:11

SIR, PLEASE CLARIFY. WHETHER THOSE WHO HAVE NOT CLAIMED THE RELIEF UNDER SEC 89 LAST YEAR CAN GET BACK THE TAX PAID DURING 08-09 ( FINANCIAL YEAR ) SINCE THE WHOLE OF 40 % ARREARS IS TAKEN AS INCOME IN 2008-09

Reply
admin Reply:
January 23rd, 2010 at 6:56 am
@KETHARAM
As per IT act, relief under section 89(1) should be claimed in the year in which we have received arrears. Though THE WHOLE OF 40 % ARREARS IS TAKEN AS INCOME IN 2008-09, we cannot revise the return filed by us in the previous year now

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Dinu said on Tuesday, January 26, 2010, 6:28

I tried online tool for calculation of relief Under section 89 (1). Apart from the release of 60% arrears, i am likely to get MACP arrears for the years 2008-09 and 2009-10 (recently approved on 21.01.2010). I hv not claimed relief during last year when 40% arrears were received. There is no provision to include the amount relating to MACP arrears. How to calculate?

Reply
admin Reply:
January 27th, 2010 at 12:16 pm
Any kind of arrears of pay and allowances can be distributed for the purpose of calculating relief under section 89(1). You have to consolidate all the arrears received by you this year and like wise all arrears relevant to each previous year have to consolidated. The consolidated amount pertaining to each year has to be entered in the relief calculation tool for calculation of relief. This is the accepted procedure as the IT provisions provides for filing only one Form 10E for the relief claimed. So all the arrears are to be consolidated

Reply
Mani said on Wednesday, January 27, 2010, 0:37

The software for section 89 should also include distributing pf contributions of previois years to those year. This gives more benefit in this section. Please take a not.

Reply
admin Reply:
January 27th, 2010 at 11:18 am
@Mani
There is no provision in IT ACT to distribute PF contributions made this year to previous years

Reply
kanchanjanga2009 said on Saturday, January 30, 2010, 13:03

u have calculated full tax on total income of 2009-10 without giving benefit of 80C & others.Firstly,u have to make out net income after deduction of any benefit(s) which is allowed in IT law for avoidance of income tax.So that please amend ur tool to that extent.As per this,ur 89 benefit looks very big which is not reality.Every assessee avails benefit of 80C while filing ITreturn.

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Dr S.S.Dash said on Monday, February 1, 2010, 22:03

Sir, Please clarify that, if a person has availed the relief under 89(1) in the last year during drawing the 40%, then whether he will include the net income as per ITR + the part of the 40% for that year in 2005-06,2006-07,07-08, or simple he will put the income as per ITR. B’cause while generating the 10E the imcome and part of the the 40% in not reflected in the respective years. The whether while including the totol income he has to inclule the whole income including the 40% income or only the actual income plus part of the 40% for that year.

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Vijay Kumar Panchal said on Thursday, February 4, 2010, 9:00

Hallo Sir today i calculat my IT but main thing is that whether to countersigned on 10E form by the CA is neccessary or not . If there is a IT Law regarding this please mention the law & sub section because our BABUS are very much against to produce without countersinged form . This will cost lot of money to us. please reply soon

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admin Reply:
February 22nd, 2010 at 10:04 pm
Counter signature of CA is not all required

Reply
A.CHANDRASEKARAN said on Monday, February 8, 2010, 20:47

I have applied for the relief from 60% arrears in this year 2009-10. But myself including my colleagues not applied for the relief 40% in the previous year due to non-awareness. Can you advise us whether we will get if apply now?

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SARBJIT SINGH DARGAN Reply:
February 19th, 2010 at 7:49 pm
go to calculation of this site related to section 89(i) and check out.

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admin said on Monday, February 8, 2010, 21:52

reply from Admin: @A.CHANDRASEKARAN

As per the existing IT Provisions there is no room for claiming relief for the arrears in the previous year. Check this IT circular for more details

http://gconnect.in/gc/service/personal-income-tax/it-calculation-2009-10-for-salaried-class-notified.html

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subhash d naik said on Wednesday, February 10, 2010, 9:34

Sir,

It is seen that Net taxable income has been taken to compute the tax and tax due for the all the years and the relief is arrived by dedcuting the tax for 2009-10 and all the previous years. However, nowhere tax paid during earlier years has been deducted to show what is the balance to be paid now during this year.

Reply
admin Reply:
February 13th, 2010 at 10:30 am
A=Tax for current year on the income without total arrears received this year
B=Tax for current year on the income with total arrears received this year
Additional tax on account of total arrears received this year = B-A
__________________________________________

x1=tax for 2006-07 on the income without arrears pertaining to that year
x2=tax for 2006-07 on the income with arrears pertaining to that year
additional tax for 2006-07 on account of distributing arrears to 2006-07=x2-x1=X

_____________________________________________
y1=tax for 2007-08 on the income without arrears pertaining to that year
y2=tax for 2007-08 on the income with arrears pertaining to that year
additional tax for 2007-08 on account of distributing arrears to 2007-08=y2-y1=Y
__________________________________________
z1=tax for 2008-09 on the income without arrears pertaining to that year
z2=tax for 2008-09 on the income with arrears pertaining to that year
additional tax for 2008-09 on account of distributing arrears to 2007-08=z2-z1=Z
_________________________________________
Relief = (B-A)-(X+Y+Z); if you get negative value relief is nil

Reply
Dr S K Ray said on Tuesday, February 16, 2010, 16:40

For P Tax and GPF Ddeduction out of arrears, whether rebate to be allowed in the receipt year or can be apportioned to the previous years ?

Reply
admin Reply:
February 17th, 2010 at 1:38 pm
GPF made during current year is applicable for deduction under Section 80C during the current year only

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svas said on Friday, February 19, 2010, 12:31

if form 16 or ITR for the year 2005-06 is not available. Can section 89 relief may be claimed or not? all the years are compulsary may please informed on top priority since FY for salary people is 26/28-02-2010.

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admin Reply:
February 22nd, 2010 at 7:54 am
Submission of returns/form-16 pertaining to previous years is necessary for verification of Form 10E to be furnished by you to your employer for claiming relief. If your employer has records relating to your income and deductions of previous years, he can check the same and allow you the relief

Reply
TRUSHAR PANCHAL said on Friday, February 19, 2010, 12:49

what should i do if an assessee receives the salary arrears for the a.y. 2005-06 or earlier a.y. because in tax relief calculator only from a.y. 2006-07 information available & certain employees are received arrears salary for earliers a.y. ?

Reply
admin Reply:
February 22nd, 2010 at 7:52 am
This tool would cater to persons who have received arrears of income from the year 2005-06

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SARBJIT SINGH DARGAN said on Friday, February 19, 2010, 19:43

an excellent informative site.hats off to it.
details regarding MACP SCHEME MUST ALSO BE INCLUDED.

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SARBJIT SINGH DARGAN said on Friday, February 19, 2010, 19:46

calculation for relief under section 89(1E and its relevant information is outstanding. keep it up.

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rohit said on Thursday, February 25, 2010, 12:19

Pls reply if arrears is receivable in installments which is spreaded over 5 years of the years starting from 2005-6 to 200-09. How to calculate the tax for the year.
Whether income from arrears of salray is taxable in the year of receipt or on accrual basis

Reply
admin Reply:
February 26th, 2010 at 9:21 pm
Method to calculate Relief under Section 89(1)
A=Tax for current year on the income without total arrears received this year
B=Tax for current year on the income with total arrears received this year
Additional tax on account of total arrears received this year = B-A
x1=tax for 2006-07 on the income without arrears pertaining to that year
x2=tax for 2006-07 on the income with arrears pertaining to that year
additional tax for 2006-07 on account of distributing arrears to 2006-07=x2-x1=X
y1=tax for 2007-08 on the income without arrears pertaining to that year
y2=tax for 2007-08 on the income with arrears pertaining to that year
additional tax for 2007-08 on account of distributing arrears to 2007-08=y2-y1=Y
z1=tax for 2008-09 on the income without arrears pertaining to that year
z2=tax for 2008-09 on the income with arrears pertaining to that year
additional tax for 2008-09 on account of distributing arrears to 2007-08=z2-z1=Z
Relief = (B-A)-(X+Y+Z); if you get negative value relief is nil

query 2: Income in the form of arrears is taxable in the year of receipt. But you are entitled to calculate relief and deduct the same from your income

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Calculate Income Tax 2009-10

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