Relief if Salary is received in Arrears or in Advance - Section 89(1)

Tax relief for salary in arrears or advance recalculates tax across years; file required documentation to claim it.

Relief under Section 89(1) recalculates tax by comparing tax with and without the additional salary in the year of receipt and by comparing the incremental tax impact in the year to which the payment pertains; allowable relief equals the excess of the increment in the year of receipt over the increment in the earlier year, subject to the prescribed computation procedure. Claimants must file Form 10E, and specified retirement encashments or amounts claimed exempt on voluntary retirement are excluded.