Income Tax Return E-Filing date has extended by the CBDT for A.Y.2015-16 Vide Circular No F.No.225/154/2015/ITA.II Dated Dated- 2nd September, 2015

Now feel free to file your Income Tax Return till date 7th September 2015, as per the CBDT Notification which recently published and below give the Notification for information to all of E-Filing Tax Payers for the Assessment year 2015-16. First the CBDT has already published the extended the date up to 7th September 2015 for Only the Gujarat State Govt, But to days  i.e. 2/9/2015 has published the Notification and mentioned the all of E-Filling Tax Payers of all over India can file the Income Tax Return from 31/8/2015 to 7/9/2015.


F.No.225J154J2015JITA.II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

                                                                                          North-Blpck, .ITA.II Division
                                                                                   New Delhi, the .. L"'''IofSeptember, 2015

                         Order under Section 119 of the Income-tax Act. 1961

For Assessment Year 2015-2016, vide even number order dated 10th June, 2015,the Central Board of Direct Taxes ('CBDT') had extended the 'due-date' for filing Income-tax returns till 31st August, 2015 in cases of those taxpayers who were required to file their tax-return by 31St July, 2015. This date was further extended till 7th September, 2015 in case of taxpayers of Gujarat in view of dislocation of general life in that State in last week of August.

CBDT has further received representations that across the country, taxpayers had faced hardships in E-Filing Returns of Income on the last date i.e. 31st August, 2015 due to slowing down of certain e-services.

Therefore, after considering the matter, CBDT in exercise of powers conferred under section 119 of the In~ome-tax Act, 1961, hereby extends the 'due-date' for E-Filing Returns of Income from 31st August, 2015 to 7th September, 2015 in respect of all the taxpayers who were required to E-File their returns by 31st August, 2015.

                                                                                                                         Jf-
                                                                                                              (Rohit Garg)
                                                                               Deputy- Secretary to the Government of India
Copyto:-
1. PS to F.M./OSD to FM/PS to MOS(R)/OSD to MOS(R)
2. PS to Secretary (Revenue)
3. Chairperson (DT), All Members, Central Board of Direct Taxes.
4. All Pr.CCsIT /CCsIT /Pr.DsGIT /DsGIT
S. All Joint Secretaries/CsIT, CBDT
6. Directors/Deputy Secretaries/Under Secretaries of Central Board of Direct Taxes
7. DIT (RSP&PR)/Systems, New Delhi, for appropriate publicity by putting it on departmental
website
8. The C&AG of India (30 copies)
9. The JS & Legal Advisor, Min. of Law & Justice, New Delhi
10. The Director General of Income Tax, NADT, Nagpur
11. The Institute of Chartered Accountants of India, IP Estate, New Delhi-ll0003
12. All Chambers of Commerce ~ .
13. CIT (OSD), Official Spokesperson of CBDT ~
                                                                                                                   (Rohit Garg )
                                                                                                Deputy- Secretary to the Government

Click here to download the CBDT’s order dated 02.09.2015 u/s 119 of the Act

Automated All in One TDS on Salary for Non-Govt Employees for F.Y. 2015-16 with Tax Planning Tips for A.Y. 2016-17 as per Budget 2015

Download the All in One TDS on Salary for Non Govt Employees for the Financial Year 2015-16 & Assessment Year 2016-17 [ This Excel Utility can prepare at a time your Income Tax Compute Sheet + Individual Salary Structure as per Non-Govt Salary Pattern + Automated HRA Exemption Calculation + Automatic Form 16 Part A&B and Form 16 Part B + 12 BA for F.Y.2015-16 with all the Modification made by the Finance Budget 2015]

http://www.itaxsoftware.net

 

Listed below are some of the best ways to minimize your payable tax and create a pool of savings for yourself. The top  tax planning tips which will help to gain in AY 2016-17 are:

Consider deductions Under 80C

The section 80C mainly deals in offering deductions to tax payers who invest in sectors like Fixed Deposits (5 years), PFF, Pension plans, EPF, etc. The scope of this deduction will allow the tax payers to claim deductions up to Rs. 1, 50, 000 for the AY 2016-17.

Use NPS Under 80CC

The term NPS represents New Pension Scheme. The Government of India has recently introduced this scheme with a view to create better saving habits amongst tax payers. Investing in the NPS will allow the tax payers to claim a deduction of INR 1, 50, 000 in the AY 2016-17. However, if a tax payer withdraws from such investment plan, then the same will become taxable.

Medical Insurance Under 80D

Your concern for health can increase your wealth! The IT Department offers a deduction of INR 25, 000 for tax payers who invest in Medical Insurance. If you are a senior citizen, then this benefit is extended to INR 30, 000.
Note: Deduction for medial insurance premia etc. u/s 80 D raised to Rs. 25,000 (Rs. 30,000 in case of senior citizens for A.Y.2016-17)

Help Disabled Dependents Under 80DDB

Taking care of a disabled person at home can become a burden. However, the Government of India is offering assistance to you by allowing you to claim a deduction of INR 80, 000 per AY in respect of the expenditure borne for taking care of the disabled person.

Repay Higher Education Loans Under 80E

Are you still carrying the burden of your higher education loan? Under the Section 80E, the IT Department allows you to claim a deduction up to Rs.1 Lakh towards loan repayment in respect of higher education.

Donation Under 80G

Charity can be a good area for you to claim deductions. Various charitable organizations accept donations from common men and donating money to one of such organizations can allow you to claim 100% deduction. All that you are required to do is maintain a proof of your donation.
Note: Deduction u/s 80G up to 100% for donation to Swachh Bharat Kosh, Clean Ganga Fund and National Fund for Control of Drug Abuse.

Payment of Interest for House Building Loans Under 24B

The significance of this section is mammoth  Under this section, a tax payer is eligible to claim a deduction of INR 2, 00, 000 as interest on house loan. Additionally, the purview of section 80C can also be combined here, which offers an additional deduction of Rs. 1, 50, 000 for House Building Loan’s principal amount. In total, you can claim a deduction of Rs. 3, 50, 000 for the purpose meeting your house acquisition costs.

Transportation Allowance Under 10

One of the lesser known areas of deduction is Section 10. Under this section, a tax payer can easily claim a deduction of Rs. 19, 200 P.A. as his transportation charges. If a person is physically disabled, then the benefit of this amount increases to INE 38, 400 P.A.

How To File Income Tax Returns After The Due Date? For Assessment Year 2015-16



Individuals can file their tax returns after the due date. However, one cannot file a revised return. The due to file income tax returns for the assessment year 2015-16 and Financial Year 2014-15 was August 31, 2015. Now, if you have not met that deadline, here are a few things that you should know.

1) If tax is paid No need to worry, in this case, as you can file the income tax return until March 31, 2017. Means that one can file an IT return of any financial year, till the completion of two years. However, a penalty will be levied for filing late, depending on the status of the tax payment.

2) If tax is not paid. For those who have not paid the taxes there will be a penalty of 1 per cent per month for the number of days or month after August 31. This is because Aug 31, was the cut-off date to file your tax returns.

3) No interest on refund amount If you have filed your returns late you will not receive any interest on the refund amount. Let's say as an example, if you had only interest income and the bank cut a TDS of Rs 25,000, you can claim the same back, by filing your returns. Now, if the IT authorities process the same after Aug 31, you are not going to get any interest on the Rs 25,000, since you have delayed filing your tax return.

4) No carry forward losses Individuals who have filed tax returns late cannot carry forward losses. Businessmen should note that facility to carry forward short term loss is not available for late filers of income tax. If you file your income tax returns on time the authorities allow you to set-off losses in the subsequent year. This will not be allowed if there is a delay in filing tax returns.

5) Penalty for late filing If an individual is filing income tax return after the assessment year, then there can be a penalty of Rs 5000.

6) Individuals who have missed the deadline cannot alter his tax return if it has been filed after the due date Individuals who have only salary income, there is no complication in computing taxes and individuals should not worry of filing tax returns late. Note that once the return is filed, the acknowledgment form should be sent to CPC department within 120 days of filing. Individuals can avoid sending to CPC by linking their aadhaar card to PAN card. The procedure is same for filing returns before and after due date. However, one can mention the same and pay penalty if applicable. Click to know how to e-file your Tax Returns quickly.

Automated Excel Based ITNS Challan 280 for Self/Advance Tax deposit Form, with Income Tax Deduction–Financial Year 2015 – 16





Income Tax guidelines–Financial Year 2015 - 16

Assessment Year 2016 - 17

General Notes

       1.   Please read the instructions before filling the form. The form needs to be filled in all aspects.


  1. All investment proofs should be made during the financial year Apr 2015 to Mar 2016.
      3.    In case the investment is made in any other name other than you, you need indicate         your Relationship.

     4.    For claiming rebate under section 80DD, 80DDB and 80U, please furnish a certificate by an authorized person in the prescribed form as defined by income tax act.

     5.              Mid Year joiners are required to furnish their previous income details in Form 12B along with the salary certificate (stamped and signed by the employer) i.e. Form 16 & Income Tax computation for calculating      the correct tax liability for the current year. In case of any income, other than salary please fill & sign Form 12 C for the same & submit along with the Investment proofs.


  1. Employee will be the held responsible for any Income tax liability to the company arising out of wrong declaration, suppression of facts by employee, false or forged documentation.


Download Excel Based  Income Tax Challan 280 ITNS  [ This Form is used for the purpose for Self and Advance Tax deposit. Who have still not deposit the amount of Tax which payable through this Challan 280 and submit to the Bank and get the Challan Receipt.]



 




Tax on Allowances


House Rent Allowance

Taxability: Subject to submission of Rental Agreement, Monthly Rent Receipts and PAN of the landlord in case the rent paid is more than Rs. 8,333 per month or Rs. 100,000 per year.

For Tax Calculation, least of the following is tax exempt
- Actual HRA Received
- Actual Rent paid over 10% of Basic salary
- 50% or  40% of Basic salary based on city of residence (Metro/Non Metro)

For claiming benefit under HRA, employee needs to submit original Rent Receipt of every quarter.
Please fill complete details on the rent receipts attached.
Photocopy of Rent receipts are not allowed.
Also please note rent agreement alone does not constitute proof of payment of rent.


Company Leased Accommodation

Taxability: 15% of taxable salary or actual rent of the house, whichever is less.

Medical (Domiciliary)U/s 80D

Reimbursement on actual medical expenses by the employer towards the amount spent by the employee in obtaining medical treatment for himself or any member of his family, not exceeding in the aggregate to Rs. 25000 in a year, is exempted from tax and Sr.Citizen Rs.30,000/- P.A. 

Conveyance Allowance U/s 10


Non-taxable up to a maximum of Rs. 1600 per month for up to 80% and Rs.3200/- for above 80% only for Phy.Disable Persons



Investment / Items eligible for Deductions under 80 C 

(Maximum eligible amount is Rs. 1,50,000)
 

Medical Insurance u/s 80D


Premium Paid on Medical policy of self, spouse, children is exempt up to Rs.25,000 and an additional benefit of Rs.25,000 in case of dependent parents below 60 years and Rs 30,000 in case of dependent parents above 60 years (Senior Citizen).

Expenses incurred on Health check up for self, spouse, dependent children / parents are exempted with in the overall limit, not exceeding the aggregate limit of Rs. 5000

In case if the premium will be due in the month of Feb 2015 & March 2015, you need to submit the last year receipts with the declaration. Late payment Charges and service tax will not qualify for the benefit.


Medical treatment of handicapped dependent with disability u/s 80DD


Expenditure incurred on medical treatment and maintenance of spouse, children, parents, brothers and sisters of the individual is deductible up to a fixed amount of Rs. 75,000. For person with severe disability over specified 80 % the limit is Rs. 125,000.Please submit the photocopy of certificate issued by the competent medical authority in a Government Hospital with the form 10i and detail of amount spent on treatment or training.


Medical treatment of dependent u/s 80DDB 


Expenditure incurred on medical treatment (specified disease or ailment as prescribed by the board) of self, spouse, children, parents, brothers and sisters is deductible up to Rs. 60,000 and for senior citizen the limit is Rs. 80,000. Please submit the photocopy of certificate issued by the competent medical authority with form 10 (i)

Person with Disability u/s 80U


An individual suffering from not less than 40% of disability can claim fixed deduction of Rs. 75,000.Rs. 125,000 for persons with severe disability of over 80%. A certificate from specified medical authority has to be given to claim the benefit with form 10i

Interest on Savings Account (Newly Introduced) - 80TTA


 

Section 80TTA is proposed to be introduced to provide deduction to an individual or a Hindu undivided family in respect of interest received on deposits (not being time deposits) in a savings account held with banks, cooperative banks and post office. The deduction is restricted to Rs 10,000 or actual interest whichever is lower.
 

Exemptions under Section 80G

Payment above INR 10,000 – Sections 80G and 80GGA Presently, deduction in respect of donations to charitable trusts is available under section 80G in respect of any donation being a sum of money. Similarly, under section 80GGA deduction is available in respect of donation for scientific research, rural development, etc. Currently there is no restriction for mode of payment for eligibility of deduction, which can be paid in cash also. Now it is provided that any such payment exceeding ` 10,000 shall only be allowed as deduction if such sum is paid in any mode other than cash.

Tax benefit on Housing Loan U/s 24B

Deduction Limits:
·         where the loan is taken on or after April 1, 1999-Rs 2,00,000/-
·         where loan is taken earlier - Rs 30,000/-
   New section 80EE inserted by the Finance Minister in the 2013 union Budget in order to promote affordable housing to the first time home loan buyers only by allowing an additional deduction of Rs 1 Lac under section 80EE

Highlights of Section 80EE are:

Additional deduction is available to only Individuals.

     2) if you have no existing house in your name and intended to be self occupied for the “First time house buyers” only

You have bought a new house, and House cost of the house is maximum of Rs 40 lacs

   4) Loan is approved and taken after 1-4-2013,

   5) Loan does not exceed  Rs 25 Lacs

Then, the  Extra interest deduction that you will get is Rs 1,00,000/- under section 80EE.If the whole amount of Rs 1 lac is not exhausted in the first   year then it can be carried forward to the 2nd year also but not more than that.


NPS 80CCD (I) – Tier I – Part of 80C. However no deduction is available in respect of employee contribution which is excess of 10% of the salary of the employee.


NPS 80CCD (II) – Tier II – Over and above 80C.  However no deduction is available in respect of employer’s contribution which is excess of 10% of the salary of the employee.


Note: as per the section 80CCE the aggregate amount of deduction under sections
80C, 80CCC and Section 80CCD(I) shall not exceed Rs. 1,50,000/-. However the contribution
made by the Central Government or any other employee to a pension scheme u/s 80CCD (II ) shall be excluded from the limit of Rs.1,00,000/- provided under this Section.



RGESS (Rajiv Gandhi Equity Saving Scheme) – 80CCG


With an annual income of Rs 10 lac will get tax benefits for investing up to Rs 50,000 in the capital markets. The maximum investment permissible under the Scheme is Rs 50,000 and the investor would get a 50 percent deduction of the amount invested from the taxable income for that year. To benefit the small investors, the investments are allowed to be made in installment in the year in which tax claims are made.

Download All in One Income Tax Preparation Excel Based Software for Govt and Non-Govt employees for Financial Year 2015-16 [ This Excel Utility can prepare at a time the Tax Compute Sheet + Arrears Relief Calculation + Automatic Form 10E + Automatic HRA Exemption Calculation + Automatic Form 16 Part A&B and Part B + Individual Salary Structure + Individual Salary Sheet for Assessment Year 2016-17]

List of Income tax Section other than 80C, as per Budget 2015, with All in One Income Tax Preparation Excel Software for Govt & Non-Govt employees for F.Y.2015-16

Download All in One Income Tax Preparation Excel Based Software for Govt & Non-Govt employees for the Financial Year 2015-16 & Ass Year 2016-17 [ This Excel Based Software can prepare at a time your Income Tax Computed Sheet + Automated HRA Exemption Calculation + Automated Arrears Relief Calculation with Form 10E + Automated Form 16 Part A&B and Form 16 Part B as per the Budget 2015] This Excel Utility can Use both of Govt and Private Concerned employees.


Most of the Tax payers are known about the Income Tax Section 80C where you can relief Max Rs. 1.5 Lakh. And Common Tax Payers only follow this section 80C, and they always follow whether the limit extended or not, which deduction are include in this Section 80C. Most of the Tax Payers are look this Only this Section.

But As per the Income Tax Act 1961, you may get Income Tax Relief from your Source of Income Directly other than Section 80C. Below given a list of Income Tax Section were you can get Relief and this deduction will be reduce your Income Tax. The below given list is shown and follow the New Finance Budget 2015-16.  Budget 2015 has been introduced in Parliament. The Finance Minister has kept the Personal Income Tax rates unchanged for the Financial Year 2015 /2016 (Assessment Year 2016-2017).

Section 80CCD:- Employee can contribute to Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be upto 10% of the salary (or) Gross Income and Rs 50,000 additional tax benefit u/s 80CCD (1b) is proposed in Budget 2015. In FY 2014-2015, the maximum tax exemption allowed under Section 80CCD is Rs 1 Lakh only. In Financial Year 2015-2016 or Assessment Year (2016-2017), this will be Rs 1.5 Lakh (u/s 80 CCD 1 ) and additional exemption of Rs 50,000 u/s 80CCD (1b) will be allowed. ( To claim this deduction, the employee has to contribute to Govt recognized Pension schemes like NPS)
(10% of salary is applicable for salaried individuals and Gross income is applicable for non-slaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to Pension Scheme, the whole contribution amount (10% of salary) can be claimed as tax deduction under Section 80CCD (2). The ceiling limit of 1.5 Lakh u/s 80CCD is not applicable on employer’s contribution.)
Section 80D Medical Insurance :-Deduction u/s 80D on health insurance premium will be Rs 25,000, increased from Rs 15000. For Senior Citizens it has been increased to Rs 30,000 from the existing Rs 20,000. For very senior citizen above the age of 80 years who are not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure.
Section 80DD :-You can claim up to Rs 75,000 (increased from the existing Rs 50,000) for spending on medical treatments of your dependents (spouse, parents, kids or siblings) who have 40% disability. It is also been proposed to increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.
Section 80DDB :An individual (less than 60 years of age) can claim upto Rs 40,000 for the treatment of specified critical ailments. This can also be claimed on behalf of the dependents. The tax deduction limit under this section for Senior Citizens is proposed as Rs 60,000 and for very Senior Citizens (above 80 years) the limit is Rs 80,000
Section 24 (B):- House Building Loan Interest:- You can claim upto Rs 2 Lakh as tax deduction on the home loan interest payment. If your property is a let-out one then the entire interest amount can be claimed as tax deduction.
Section 80EE:- House Building Loan Interest :- You can get another Relief from the House Building Loan Interest U/s 80EE which was introduce in the Financial Year 2013-14 and this Section remain continue for forth comming financial Year. The Max Limit Rs. 1 Lakh and the this relief can get who are HB Interest Paid since 1/4/2013 and onwards.
Section 80U :- You can claim up to Rs 75,000 (increased from the existing Rs 50,000) who have 800% disability. It is also increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability above 80 %

       Section 80 TTA :This Section can get relief from Income Tax from the Savings Bank Interest             Max Rs.10,000/- who's taxable Income less than 5 lakh.

     Section 87A :- This Section can get Relief from Income Tax as Tax Rebate Max. Rs.2,000/- who's         Taxable Income Less than 5 Lakh.

     Section 10(13A) : House Rent Exemption  Max Rs. 50%,40% or 10% of Basic pay +                  D.A. + Spl allowances which ever is less [ Download HRA Exemption Calculator U/s 10(13A)

   Section 89(1) :- Arrears Relief from Income Tax, some of employees have received the             salary amount from his Previous Financial Year, which may break up and can get relief this       section and also he have to submit the Form 10e.[ Download the Arrears Relief Exemption       Calculator U/s 89(1) with Form 10E, Since 2000-01 to 2014-15 ]

How to save more this financial year 2015-16,Plus Automatic HRA Exemption Calculator

As the new Financial Year begins, now is the best time to save. From ways to claim maximum tax benefits to various avenues of personal savings that earn attractive income tax rebates, this guide will help you make informed choices.

During his Budget speech, Finance Minister Arun Jaitley said an individual tax payer can claim tax benefits for up to Rs. 4,44,200 in addition to the tax exemption.

Download Automatic House Rent Exemption Calculator U/s 10(13A)

No change in tax slabs for individual payers

Increased exemption limits on health insurance premium and transport allowance were announced in the Union Budget for 2015.

Public provident fund

This dependable small saving scheme offers 8.7 per cent interest per annum and comes with a lock-in period of 15 years. Part withdrawal and loan is also possible. Maturity is also exempted from IT.

Sukanya-Samriddhi

A small savings scheme through India Post for the welfare of girl child, it presently yeilds 9.2 per cent per annum. Being a long-term corpus fund, the amount matures when the daughter turns 21. Till then, you can enjoy IT exemption under Sec. 80(C).

Employee Provident Fund

The Employee Provident Fund Act is likely to be amended this year. The big change on this front is that the pension option has been withdrawn for new employees. The entire EPF corpus will be given at the time of retirement without tax deducations.

National Pension Scheme

Budget has granted an additional tax deduction of Rs.50,000 for investment in the New Pension Scheme. So start to save early, for a financially-independent post-retirement life.

Home loans

Repayment of the Principal amount in entitled for income tax rebate under Section 80 (C). Tax deducation upto a maximum of Rs. 2 lakh can be availed if the property is self-occupied. Whole interest is tax deductible incase the property is not self-occupied.

Insurance

Premiums paid on ULIP, pension plans, endowment and pure terms are exempted from tax upto Rs. 1.5 lakh under Section 80(C).

Health

Under Section 80(D) premiums paid on health insurance for self, spouse, children are tax deductible upto Rs. 35,000. Additional rebate of Rs. 20,000 for senior-citizen dependent parents.

Small Saving Schemes

The once-popular Kisan Vikas Patra is back through India Post. Small contributions in denominations of Rs. 1000, 5000, 10,000 and 50,000, with no upper ceiling on investment, will double in 100 months.

Automatic Arrears Relief Calculator U/s 89(1) with Form 10 E from the FY 2000-01 to FY 2014-15

Some Simple Steps to use  Income Tax Relief Calculator U/s 89(1) with Form 10E:

1. Divide the Arrears amount you have received in the year 2013-14 in to parts and enter those in  IT Relief Calculator in the relevant years in which those were actually due. 

Download Arrears Relief Calculator + 10E with Income Tax Calculator for the Financial Year 2014-15 

This division of Arrears in to parts can be easily made by Calculating the year wise total of the arrears amount using Pay due & drawn statement supplied to you while paying Pay arrears. For example, if an employee has received an arrears amount in the year 2014-15, being the unpaid pay for the period from March 2000 to Feb 2015, the same has to be distributed as pay arrears relevant to the years 2001-02, 2009-10, 2010-11, 2011-12 and 2014-15. The other fields for arrears in the years 2005-06, 2006-07, and 2007-08 in this case have to be entered with zeros as no arrears are due in these years.
2. Keep the copies of your IT Returns / Form 16 for the years from which the arrears is due. If your arrears is due from the year April 2007 to Feb-2011, copies of IT Returns from the financial years 2007-08, 2008-09, 2009-10, 2010-11 will be required for making entries in the  IT relief Calculator as well as for submission to your employer along with Form 10 E. 
The fields provided for other financial years in this case , i.e 2005-06, 2006-07, and 2007-08 can either be filled up with Net taxable income for that year or with zeros. Net Taxable income refers to Income based on which Income Tax for the year is calculated i.e Net income after all regular deductions and exemptions etc. For the sake of many of readers who are raising the doubt that whether any other arrears received in the previous years has to be shown for calculating IT relief for this year, we clarify that since you are taking net taxable income as per ITR it will be inclusive any other arrears amount received in the previous years.
3. Also, enter the income tax relief amount under section 89 deducted/availed by you during the previous years if any (2008-09, 2009-10, 2010-11, 2011-12, and 2012-13) in the relevant fields provided for this purpose in.
As a result, this income tax relief Tool for the year 2013-14 will Calculate your exact income tax liability during these years after deducting income tax relief availed by you.
4. While entering the taxable income for the current year 2013-14, exclude the total arrears received by you this year (2013-14), for which relief under Section 89(1) is intended to be claimed this year.
This is because the tool automatically take into account the break-up of arrears entered you in the relevant field provided in the tool From the Financial  Year 2000-01 to up to date Financial Year 2014-15
5. Now all mandatory entry work is over. Fill up your Name, PAN, Address etc as these relevant details in Form 10 E. Finally, Click the “Calculate Relief” Button. The tool would calculate the Income Tax Relief available to you if any in the field named as “Relief under Section 89 [B-A]“. Then Click “Generate Statement of Relief to be produced to IT – Form 10 E”. Now the prescribed Form-10E Statement will be generated for the Income Tax Relief Claimed. This statement has to be submitted to your employer along with copies of previous years Form 16 or IT returns.

How Income tax relief under Section 89 is calculated?

  • This tool calculates income tax to be paid for the relevant previous by distributing the arrears to the relevant years.
  • Then summation of this income tax is compared with the income tax that is to be payable for the income in 2013-14 after including the entire arrears received during this year.
  • If the total income tax payable in the previous years after including the distributed arrears is lesser than the income tax payable for the income of current year (2013-14) after including entire arrears during this year. The difference between both of these figures is allowed as Income tax relief under Section 89 of Income Tax Act.
  • If this distribution did not result in the lesser payment of income tax for the previous years, no income tax relief is available.
The following are relevant Sections and Rules for claiming Income Tax Relief for the Arrears of Salary Income

Section 89 of IT Act

Relief when salary, etc., is paid in arrears or in advance.

89. Where an assessee is in receipt of a sum in the nature of salary 89A, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed
Provided that 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 sub-clause (i) of clause (10C) of section 10, 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 clause (10C) of section 10 in respect of such, or any other, assessment year

Rule 21A of IT Rules

Relief when salary is paid in arrears or in advance, etc.

21A.   (1) Where, by reason of any portion of an assessee’s salary being paid in arrears or in advance or, by reason of any portion of family pension received by an assessee being paid in arrears or, by reason of his having received in any one financial year salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, his income is assessed at a rate higher than that at which it would otherwise have been assessed, the relief to be granted under sub-section (1) of section 89 shall be—
          (a)  where any portion of the assessee’s salary is received in arrears or in advance or, any portion of family pension is received by an assessee in arrears, in accordance with the provisions of sub-rule (2);
(b)  where the payment is in the nature of gratuity in respect of past services of the assessee extending over a period of not less than five years, in accordance with the provisions of sub-rule (3);
          (c)  where the payment is in the nature of compensation received by the assessee from his employer or former employer at or in connection with the termination of his employment after continuous service for not less than three years and where the unexpired portion of his term of employment is also not less than three years, in accordance with the provisions of sub-rule (4);
          (d)  where the payment is in commutation of pension, in accordance with the provisions of sub-rule (5); and
          (e)  where the payment is not in the nature of salary paid in arrears or in advance or gratuity in respect of past services or compensation received at or in connection with the termination of employment or in commutation of pension, in accordance with the provisions of sub-rule (6).
(2)(a) In a case referred to in clause (a) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the salary is received in arrears or in advance or, in which the family pension is received in arrears (such salary or family pension being hereafter in this sub-rule referred to respectively as the additional salary or additional family pension, as the case may be, and such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the additional salary or additional family pension, calculated in the manner specified in clause (b), exceeds the tax or the aggregate tax on the additional salary or additional family pension, calculated in the manner specified in clause (c) or clause (d), as the case may be.
(b) Tax shall be calculated on the total income of the relevant previous year as reduced by the additional salary or additional family pension, as the case may be, as if the total income so reduced were the total income of the assessee, and the amount by which the tax so calculated falls short of the tax on the total income before such reduction shall, for the purposes of clause (a), be taken to be the tax on the additional salary or additional family pension, under this clause.
(c) Where the additional salary or additional family pension, as the case may be, relates to only one previous year, tax shall be calculated on the total income of the said previous year as increased by the additional salary or additional family pension, as if the total income so increased were the total income of the assessee, and the amount by which the tax so calculated exceeds the tax payable by the assessee in respect of the total income of the said previous year shall, for the purposes of clause (a), be taken to be the tax on the additional salary or additional family pension, under this clause.
(d) Where the additional salary or additional family pension, as the case may be, relates to more than one previous year,—
           (i)  the previous years to which the additional salary or additional family pension relates and the amount relating to each such previous year shall first be ascertained;
          (ii)  tax shall, then, be calculated on the total income of each such previous year as increased by the amount relating to such previous year ascertained under sub-clause (i); as if the total income so increased were the total income of that previous year, and the amount by which the aggregate amount of tax in respect of the aforesaid previous years as calculated under sub-clause (ii) exceeds the aggregate amount of tax payable by the assessee in respect of the total income of the said previous years shall, for the purposes of clause (a), be taken to be the aggregate tax on the additional salary or additional family pension, under this clause.]
(3)  (a) In a case referred to in clause (b) of sub-rule (1), the tax payable by the  assessee on his total income of the previous year in which the payment by way of gratuity is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the amount of the gratuity included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such gratuity, calculated at the rate of tax determined under clause (b) or, as the case may be, clause (c).
(b) Where the payment by way of gratuity is made in respect of past services of the assessee extending over a period of not less than five years but less than fifteen years,—
           (i)  the total income of the assessee in respect of each of the two previous years immediately preceding the relevant previous year shall be  increased by an amount equal to one-half of the amount of the gratuity included in the total income of the relevant previous year, and the average rate of tax for each of the said two previous years shall be calculated as if the total income so increased were the total income of that previous year; and
          (ii)  the average of the average rates of tax for the two previous years immediately preceding the relevant previous year, calculated in accordance with sub-clause (i), shall, for the purposes of clause (a), be the rate of tax determined under this clause.
(c) Where the payment by way of gratuity is made in respect of past services of the assessee extending over a period of not less than fifteen years,—
           (i)  the total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third  of the amount of the gratuity included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and
          (ii)  the average of the average rates of tax for the three previous years immediately preceding the relevant previous year, calculated in accordance with sub-clause (i), shall, for the purposes of clause (a), be the rate of tax determined under this clause.
(4)  (a)  In a case referred to in clause (c) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the payment by way of compensation is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the amount of the compensation included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such compensation, calculated at the rate of tax determined under clause (b).
(b) The total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of the compensation included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the purposes of clause (a), be the rate of tax determined under this clause.
(5)  (a)  In a case referred to in clause (d) of sub-rule (1), the tax payable by the assessee on his total income of the previous year in which the payment in commutation of pension is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the payment in commutation of pension included in the total income of the relevant previous year, calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such payment, calculated at the rate of tax determined under clause (b).
(b) The total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of payment in commutation of pension included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the purposes of clause (a), be the rate of tax determined under this clause.
(6) In a case referred to in clause (e) of sub-rule (1), the Board may, having regard to the circumstances of the case, allow such relief as it deems fit.

Provision for Form 10 E

Furnishing of particulars for claiming relief under section 89(1).

21AA.  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 relief under sub-section (1) of section 89, he may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the particulars specified in Form No. 10E.
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