Aportioning pension arrears due from 2007 onwards and recd. in 2011

Hi Pankaj,

I am a female VRS employee of BSNL,Chennai Telephones.After the 6th pay commision I recd. the pension arrears in Sep 2011.These arrears are due from 2007 onwards.Can the arrears be aportioned for the years 2007 onwards so that I need not pay any tax. Kindly clarify this so that I can give a detailed information about the yearwise arrears ,income and savings.

hanks Pankaj

asked Mar 10 '12 at 06:27 by bragada 1111

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 this in 2007, say you were in 10% slab rate due to less income, then 10.3% tax would have been deducted. So there is a payment of extra 20.4% because of late payment and hence deduction for same can be taken.

answered Mar 10 '12 at 11:08 by Pankaj Batra 5.2k320


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Asked: Mar 10 '12 at 06:27

Seen: 1,709 times

Last updated: Mar 10 '12 at 11:08