If you received arrears of salary/pension in the previous financial year 2020-21, your tax liability will be higher due to arrears; did you know that you can double your income from arrears? You can get relief on the relevant year and 89 (1) of the Income-tax Act, 1961.
We have prepared a small Excel calculator which will be helpful to calculate the relief under 89 (1) with Form 10E for the buckets received in F|Y 2020-21 and the arrears are related to the oldest till the financial year 2000-01.
How it works
This calculator shows two calculations of income tax, one is a tax on the basis of salary / arrears and the other is a tax on the basis of relevant years and if the tax on the basis of receipts is higher on the basis of the relevant year, relief will be available under Section 89 (1) not available means there is no benefit in the distribution of arrears in the respective years.
How to use it?
Note / FAQ about calculator usage you only need to fill in the white Cell. All colour cells are only necessary which is not mandatory to fill. Fill in the blanks where no figure is required for men and for women and for Senior Citizens.
You must select the status each year. Ensure that the position is correctly selected. Fill in the total income with arrears including all other incomes and the arrears from the Financial Year 2000-21 to the Financial Year 2020-21 under the relevant year after all exemptions like Section 80C, 80CC, 80D, 80G, 80U etc. Fill out.
The total will appear automatically under the 2020-21 financial year. The arrears column (C-11) 2020-21 of the accounts under the financial year is secured and cannot be edited. (C-10 of the calculation sheet) not included for inclusion. The result is that if the total is A> Total B, relief will be shown under Section 89 (1), otherwise 0 will be displayed. Form 10E with the next relevant attachment will also be filled automatically along with Table-1 in the Form 10E
