Tax relief on salary arrears. The Salary Arrears Relief Calculator (89(1)) takes arrears received this year, this year's taxable income excluding arrears, taxable income of the year the arrears relate to, tax regime and returns relief under section 89(1) plus extra tax if arrears are taxed this year, extra tax if they had been taxed in the original year. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Indian tax rules change with each Finance Act and GST Council meeting. The rates here follow the current published rules, but confirm the figures on the official portals or with a chartered accountant before filing or invoicing. Use the worked example below to check the maths against your own figures.
How the Salary Arrears Relief Calculator (89(1)) works
Arrears push you into a higher slab in the year you receive them. Section 89(1) refunds the extra tax you pay compared with what you would have paid had the money arrived on time. File Form 10E to claim it.
Worked example
With the example values (arrears received this year of ₹300,000, this year's taxable income excluding arrears of ₹1,200,000, taxable income of the year the arrears relate to of ₹900,000, tax regime "New regime"), the relief under section 89(1) is ₹109,200.00; extra tax if arrears are taxed this year ₹109,200.00, extra tax if they had been taxed in the original year ₹0.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
Assumptions and limits: Uses current-year slabs for both years; the actual computation uses the slabs of each year.
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Frequently Asked Questions
How is relief under section 89(1) calculated?
relief = (tax on this year's income with arrears − without) − (tax on the earlier year's income with arrears − without).
Which figures do I need?
Arrears received this year, this year's taxable income excluding arrears, taxable income of the year the arrears relate to, tax regime. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Are the rates current?
The calculator uses the rates and rules published for the current financial year and shows them under the result. Rates change with each Budget and GST Council decision, so verify on the official portal before filing.
What assumptions does this calculator make?
Uses current-year slabs for both years; the actual computation uses the slabs of each year.
