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

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..... section 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 RELIEF .....

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..... 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 any amount received by the assessee on h .....

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