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

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....tion 89(1). * For a taxpayer, tax liabilities for a Financial Year are calculated from the income earned during that year. Sometimes, that income includes arrears (past dues paid in the current year). * Usually tax rates increase with time which means that you may have to pay higher taxes in such case. However, Income Tax Act provides you relief in those situations u/s 89(1). COMPUTATION OF ....

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....d. Note: If amount at Step 6 > amount at Step 3, no relief shall be allowed. Points to remember: * The relief u/s 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 us 10(10AA). * No relief shall be granted in respect of....