Procedure for granting relief under section 89(1) of the Income-tax Act, 1961

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....x. Sir,             Subject:  Procedure for granting relief under section 89(1) of the Income-tax Act, 1961.        Section 89(1) of the Income-tax Act, 1961, authorises grant of relief in a case where an employee receives salary in arrears or in advance or has received in any financial year sal....

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....ved; (c) Where the payment is in the nature of compensation received by the employee from his employer or former employer at or in connection with the termination of his employment after continuous service of not less than three years and where the unexpired portion of the term of employment is also not less than three years; (d) Where the payment is in the nature of commutation of pension; ....

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....ear of receipt. Basically, the relief under section 89(1) is arithmetical. It involves finding out of two rates of tax. The first is the rate of tax applicable to the total income including the extra amount in the year of receipt. The second is finding out the rate by adding the arrears to the total income of the years to which they relate. For this purpose, the assessee should be asked for a true....