1. Further to my article How To File Form 10E in New Tax Portal – Arrears Under Sec 89 dated 21.06.2021, let’s try to understand the calculation of Relief and procedure to file FORM 10E with the help of practical Illustration
Form 10 E is enabled on New Income Tax Portal.
2. ILLUSTRATION: Mr. Prasanna received the arrears of salary in FY 2020-21. The Arrears pertains to the salary for FY 2017-18, FY 2018-19, FY 2019-20. Details are as follows:
|Sl||Particulars||Financial Year||Assessment Year||Amount (Rs.)||Amount( Rs.)|
|b||Arrears for the year||2017-18||2018-19||75,000|
|c||Arrears for the year||2018-19||2019-20||1,00,000|
|d||Arrears for the year||2019-20||2020-21||1,25,000|
|e||Total Arrears (b+c+d)||3,00,000|
|f||Total Salary (including Arrears (a+e)||2021-22||11,00,000|
|g.||Tax (including H&E Cess) on total salary including arrear ( Tax on income (f))||2021-22||1,48,200|
|h.||Tax (including H&E Cess) on total salary without considering arrear ( Tax on (a))||2021-22||75,400|
|i||Additional Tax due to Arrears (g-h)||2021-22||72,800|
3. CALCULATION OF RELIEF UNDER SECTION 89(1) It is advisable to do the following calculations and keep the figures ready for cross-checking before filing Form 10E on the new Income Tax Portal. New Income Tax Portal is giving wrong tax calculation which is editable and can be corrected as per the pre calculated amount .
|Sl||PARTICULARS||FY 2017-18 (AY 2018-19)||FY 2018-19 (AY 2019-20)||FY 2019-20 (AY 2020-21)|
|Before Arrears||After Arrears||Before Arrears||After Arrears||Before Arrears||After Arrears|
|a||Total Income (Rs.)||575000||575000||600000||600000||675000||675000|
|e||Net Taxable Income(c-d)||425000||500000||450000||550000||525000||650000|
|f||Tax Liability *||9013||12875||10400||23400||18200||44200|
|g||Tax on Arrear (tax after arrears- before arrears)||3862||13000||26000|
|h||Total Tax on Arrears in respective years||If the amount is received in respective years, the tax liability would be Rs 3862+13000+26000 = Rs 42,862
|i||Relief U/S 89(1)||Additional Tax Liability due to late receipts of amount
Rs. 72,800-42,862 = Rs. 29938/-
4. TAX CALCULATOR For calculating Tax Liability * of previous Financial Years Income: go to www.incometaxindia.gov.in ( Registration & login is not required for tax calculator)
Click on Tax Tools under the heading Tax Information & Services
Click on Income and Tax Calculator
Select Assessment Year > Enter the amount. Tax Liability will be calculated automatically.
You can calculate tax liability (pre receipt of arrears and post receipt as well) for each of the previous years with the help of this calculator.
4. FILING OF FORM 10E: Refer to heading Step by Step Procedure to File Form 10E in the article How To File Form 10E in New Tax Portal – Arrears Under Sec 89 dated 21.06.2021.
Login to http://www.incometax.gov.in
On the File Income Tax Forms page, select Form 10E.
Choose the Assessment Year (A.Y.) and click Continue.
On the Instructions page, click Let’s Get Started.
Choose the required sections to be filled and click Continue.
Personal Information will be auto-populated. You can edit/ modify if required. Click on Arrear Salary / Family Pension
First, enter the details in Table A (as calculated above with the help of a tax calculator)
Now add the details in Arrears Salary (Annexure 1) & cross-check the amount calculated with the help of the tax calculator and amount auto calculated in Form 10E above.
New Income Tax Portal is giving wrong tax calculation which is editable and can be corrected as per the below calculation. It is not even accepting 0 value wherever tax is Zero. Write X amount i.e Rs 10 and Edit later on before clicking on save.
Click on Save & file Form 10E after e-verifying the same.
Note: An online session of live filing of Form E will be conducted by the Author on Knowledge Sharing Hub on 31st July 2021 at 08.00 pm. For attending the session, please contact CMA Satish Mehta – Mobile Number +91 9825231592
Disclaimer: The article is for education purposes only.
The author can be approached at email@example.com