Friends,
If you have received a bulk amount on account of arrears of salary in this financial year which actually pertains to previous years than one can bifurcate the same. By bifurcating one can take the full benefit of saving the Tax. The same can be claimed u/s 89(1) of Income Tax which allows the tax payer to claim this benefit.
Relief When Salary Paid in Arrears or Advance u/s 89(1) of Income Tax
Under section 192(2A) where the assessee, being a
Government servant or an employee in a company, co-operative society, local
authority, university, institution, association or body is entitled to the
relief under Section 89(1) he may furnish to the person responsible for making
the payment referred to in Para (3.1), such particulars in Form No. 10E duly
verified by him, and thereupon the person responsible, as aforesaid, shall
compute the relief on the basis of such particulars and take the same into
account in making the deduction under Para(3.1) above.
Here "University means a University
established or incorporated by or under a Central, State or Provincial Act, and
includes an institution declared under section 3 of the University Grants
Commission Act, 1956(3 of 1956), to be University for the purposes of the Act.
With effect from 1-4-2010 (AY 2010-11), no such
relief shall be granted in respect of any amount received or receivable by an
assessee on his voluntary retirement or termination of his service, in
accordance with any scheme or schemes of voluntary retirement or in the case of
a public sector company referred to in section 10(10C)(i) (read with Rule 2BA),
a scheme of voluntary separation, if an exemption in respect of any amount
received or receivable on such voluntary retirement or termination of his
service or voluntary separation has been claimed by the assessee under section
10(10C) in respect of such, or any other, assessment year.
