Relief if Salary is received in Arrears or in Advance - (New) Section 157(1) / (Old) Section 89(1)

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.... under section 18(1); or • (d) Arrears of Family Pension - arrears of "family pension" as defined in section 93(1)(d), • the Assessing Officer shall on an application made to him by the assessee in this behalf, grant such relief, as may be prescribed. Direct Claim by Assessee under section 157(1) [ Rule 73(3) ] • Mandatory compliance for claiming relief • Assessee must submit Form No. 39 • Before due date of return specified under section 263(1)(c). Claim through Employer [ Rule 73(4) ] • Employees of: • Government • Company • Co-operative society • Local authority • Un....

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....+ R3) / 2 Relief G x (R1-RAvg), if R1 exceeds R Avg Meaning of Term • Y1 = relevant tax year; • Y2 = tax year immediately preceding Y1; • Y3 = tax year immediately preceding Y2; and • Y4 = tax year immediately preceding Y3. 3. Gratuity received in respect of past services extending over a period of not less than fifteen years. Component Meaning G Gratuity amount received in relevant tax year R1 Avg tax rate in current year including gratuity amount received in Y1 R2 Avg tax rates of Y2 previous years (after adding ⅓ gratuity) R3 Avg tax rates of Y3 previous years (after adding ⅓ gratuity) ....

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.... Component Meaning P Commutation of Pension amount received in relevant tax year R1 Avg tax rate in current year including Compensation amount received in Y1 R2 Avg tax rates of Y2 previous years (after adding ⅓ Comprensation) R3 Avg tax rates of Y3 previous years (after adding ⅓ Comprensation) R4 Avg tax rates of Y4 previous years (after adding ⅓ Comprensation) RAvg (R2 + R3 + R3) / 3 Relief C x (R1-RAvg), if R1 exceeds R Avg Meaning of Term • Y1 = relevant tax year; • Y2 = tax year immediately preceding Y1; • Y3 = tax year immediately preceding Y2; and • Y4 = t....

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....alculate tax payable on the total income of the year to which the arrears relate, excluding arrears 5. Calculate tax payable on the total income of the year to which the arrears relate, including arrears 6.Calculate difference between Step 4 and Step 5 7. Excess of amount at Step 3 over Step 6 is the tax relief that shall be allowed. Note: If amount at Step 6 > amount at Step 3, no relief shall be allowed. Points to remember: • The relief under section 89 is to be given in the assessment year in which the extra payment by way of arrears, advance, etc. is taxed. • The encashment of leave salary on retirement whether on superannuation or otherwise has already been exempted under ....