Tax Exemption from Salary Arrears - Filing Form 10E in the new tax portal| With Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10 E for the F.Y.2021-22 (Updated Version)

 

 1. Tax Exemption from Salary Arrears | How to file Form 10E in the new tax portal Let's try to 

understand the calculation of arrears, relief dated 21.06.2021 on Sec 89 and how to file Form 10E to 

New Income Tax Portal?

2. Illustration: Mr Pabir Mahato received arrears of salary in the financial year 2011-2012. The arrears are related to the salaries of FY 2017-18, FY 2018-19, FY 2019-20. The details are as follows:

 

Sl	Particulars	Financial Year	Assessment Year	Amount (Rs.)	Amount( Rs.)
a	Taxable Salary	2020-21	2021-22		8,00,000
b	Arrears  for the year	2017-18	2018-19	75,000
c	Arrears  for the year	2018-19	2019-20	1,00,000
d	Arrears for the year	2019-20	2020-21	1,25,000
e	Total Arrears (b+c+d)				3,00,000
f	Total Salary (including Arrears (a+e)		2021-22		11,00,000
g.	Tax (including H&E Cess) on total salary including arrear ( Tax on income (f))		2021-22		1,48,200
h.	Tax (including H&E Cess) on total salary without considering  arrear ( Tax on (a))		2021-22		75,400
i	Additional Tax due to Arrears (g-h)		2021-22		72,800

 

3. Reliable calculations under section 89 (1) It is advisable to make the following calculations and keep the statistics ready before filing Form 10E in the new income tax portal. The new income tax portal is giving wrong tax calculations which can be edited and corrected according to the pre-calculated amount.

Sl	PARTICULARS	FY 2017-18           (AY 2018-19)		FY 2018-19 (AY 2019-20)		FY 2019-20 (AY 2020-21)
		Before Arrears	After Arrears	Before Arrears	After Arrears	Before Arrears	After Arrears
a	Total Income (Rs.)	575000	575000	600000	600000	675000	675000
b	Arrears		75000		100000		125000
c	Total Income (a+b)	575000	650000	600000	700000	675000	800000
d	Deductions	150000	150000	150000	150000	150000	150000
e	Net Taxable Income(c-d)	425000	500000	450000	550000	525000	650000
f	Tax Liability *	9013	12875	10400	23400	18200	44200
g	Taxon Arrear (tax after arrears- before arrears)	3862		13000		26000
h	Total Tax on Arrears in respective years	If the amount is received in respective years, the tax liability would be Rs 3862+13000+26000 = Rs 42,862
i	Relief U/S 89(1)	Additional Tax Liability due to late receipts of amount Rs. 72,800-42,862 = Rs. 29938/-

Download Automated Income TaxArrears Relief Calculator U/s 89(1) with Form 10-E in Excel from theF.Y.2000-01 to F.Y.2021-22 (Updated Version)