Rule 21A - Relief when salary is paid in arrears or in advance, etc.

Relief for lump sum or arrears salary reduces tax by apportioning or averaging income across relevant years.

Relief applies when lump-sum or temporally misaligned receipts-salary in arrears or advance, family pension arrears, gratuity, termination compensation, or pension commutation-raise an assessee's tax rate. The rule prescribes isolating the additional amount, apportioning it to relevant prior years where necessary, and computing tax either by recalculating total income without the additional amount or by averaging increased totals of prior years to determine the tax attributable to the additional payment, which then reduces tax in the year of receipt.