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Dear Sir I have received arrears for the FY 2010-11 in the month of February 2012. My employer deducted the income tax from my salary. When filing the tax returns, is there any exemption for the arrears ? asked Mar 08 '12 at 17:28 by KV Lu 1●1●1●1 |
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You can claim a tax deduction under Section 89(1). You would need to compute income tax on the arrears if it would have been received in actual year. Now difference of income tax between payment year and actual year would be allowed for deduction. Say, you received 1 lakh as arrears this year and 30.6% tax was deducted on it. If you had received last year, say you were in 20% slab rate due to less income, then 20.4% tax would have been deducted. So there is a payment of extra 10.2% because of late payment and hence deduction for same can be taken. answered Mar 09 '12 at 14:40 by Pankaj Batra 5.2k●3●20 |