Online tool to calculate Rebate under Section 89(1)

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Saturday, November 14, 2009
This article is posted in Income Tax category and has 54 Comments so far.

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

  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

  2. 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 ?

  3. 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.

  4. 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

  5. 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” .

  6. admin said on Tuesday, November 17, 2009, 19:18

    @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

  7. 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).

  8. 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.

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

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

  10. 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

  11. 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.

  12. 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.

  13. 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.

  14. admin said on Thursday, November 19, 2009, 6:47

    @ 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

  15. 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.

  16. admin said on Thursday, November 19, 2009, 13:57

    In the simplified tool launched now it is included. Pl check up

  17. admin said on Thursday, November 19, 2009, 14:21

    @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)

  18. 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)

  19. 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

  20. admin said on Monday, November 23, 2009, 9:21

    @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

  21. 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.

  22. 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

  23. admin said on Thursday, November 26, 2009, 13:11

    @ 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

  24. 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 .

  25. admin said on Friday, November 27, 2009, 14:57

    @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.

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

    VERY TYPICAL CALCULATION

  27. 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.

  28. 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.

  29. admin said on Monday, November 30, 2009, 22:25

    @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.

  30. 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.  
     

  31. admin said on Thursday, December 3, 2009, 10:20

    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

  32. 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,

  33. admin said on Saturday, December 5, 2009, 9:00

    @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”

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

    Calculator should also cater for senior citizens. Thanks.

  35. 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.

  36. 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

  37. 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.

  38. 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.

  39. 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.

  40. admin said on Monday, December 28, 2009, 14:59

    @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

  41. 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?

  42. 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.

  43. admin said on Friday, January 8, 2010, 15:22

    @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

  44. 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.

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

    WONDERFUL PROGRAMME THANK YOU VERY MUCH

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

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

  47. 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

  48. admin said on Saturday, January 23, 2010, 6:56

    @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

  49. 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?

  50. 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.

  51. admin said on Wednesday, January 27, 2010, 11:18

    @Mani
    There is no provision in IT ACT to distribute PF contributions made this year to previous years

  52. admin said on Wednesday, January 27, 2010, 12:16

    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

  53. 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?

  54. 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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