If you received any Salary Arrears from the previous financial years to this financial year as such your Tax Liability raised to this financial year by the previous year’s salary arrears amount. But this salary amount you received from the previous financial years. So your tax burden enhances this financial year as total salary income. Like as you’re any due amount as D.A. Arrears, Due to any salary amount, due to any gratuity amount etc. Suppose your total gross salary amount in this financial year Rs. 5,00,000/- and you received Arrears Salary amount for the Financial Year 2017-18 amounting Rs. 1,50,000/- then your total Gross Salary income will 6,50,000/-( Rs. 5 lakh + 1.5 lakh). But this arrears salary amount for the financial year 2017-18.
As per the Tax Slab for the financial year 2017-18, you could not pay any tax as you are under the tax slab for the said financial year, But in this financial year 2020-21 you have received the extra 1.5 lakh as arrears salary from the previous financial year’s (2017-18) and your gross salary amount may raise more than 1.5 Lakh.
In this regard as per the Income Tax Act and the Income Tax Section 89(1) you may relief the tax burden in this financial year through the bifurcation of the said arrears amount to the previous financial year (2017-18) only filling the Income TaxForm 10E.
So many salaried person can not know about this Income Tax Section 89(1) as well as the Form 10E and also they can not know how to bifurcation the arrears amount to the previous financial year. Don’t Worry, you may calculate arrears relief benefits by the below given simple Excel Based Utility, which can calculate your arrears salary amount from the financial the year 2000-01 to the financial year 2020-21, without any trouble.
