Income Tax Relief under Section 89 – Calculator

How to calculate Income Tax Relief under Section 89 of Income Tax Act ? – GConnect online Income Tax Relief Calculator

Income Tax Relief Calculator for the FY 2021-22

Enter Net Taxable Income as per ITR / form 16 for the years to which Arrears are to be distributed.

For example arrears recieved now in the year 2021-22 is pay or allowance for the period from 2008-09 to 2021-22, then split the arrears in to parts equilvalent to arrears of pay applicable to each year from 2008-09 to 2021-22.

  • Enter these part values in the boxes given for arrears in the relevent years. Since Taxable Income and arrears for the period from 2005-06 to 2007-08 are not applicable in the above illustration, ensure that those fields are filled with numerical Zeros
  • If Income Tax Relief availed in the preivious years, enter those in the relevent years to find the actual tax paid in those years
  • Click Calculate IT Relief Button after entering all values to find Income Relief applicable for the year 2021-22
  • Click Generate Form 10 E Statement button, which will open the filled up Form 10E the statutory statement that has to be filed with the employerfor claiming Income Tax Relief under Section 89 (1) of Income Tax Act.

How Income tax relief under Section 89 is calculated?

This tool calculates income tax by distributing the arrears to the relevant years.

As per Section 89 and other related provisions, Income Tax Relief will be available in the following situation.

1. Arrears received has to be split in to values related to previous years.

2. As a first step, Income Tax of previous years has to be calculated without including distributed arrears. Then Income tax has to be calculated for all these previous years by including the distributed arrears.

3. Difference in income tax on income with arrears and without arrears for each year has to be calculated.

4. All these differential values in income tax has to be added to find out total difference in income tax if Arrears is distributed to previous years . Let it be called as "A"

5. Then Income Tax for the current years without including the total arrears has to be calculated. Also Income tax for the current year after including total arrears has to be calculated. Now difference between these 0708 Income Tax amount is to be taken as "B"

6. If B-A is a negative value or 0506, then no income tax relief is available

7. If B-A is possitive value then this amount can be deducted from the Income Tax payable for the current which is known as Income Tax Relief under Section 89 (1) of Income Tax Act.

Section - 89, Income-tax Act, 1961 amended up to 2021

B.—Relief for income-tax

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

Section 89. Where an assessee is in receipt of a sum in the nature of salary 55, being paid in arrears or in advance or is in receipt, in any 0607 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 56:]

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

Income Tax Relief under Section 89 - Entry Form - Click the Titles below to enter values
  • Personal Details (click to enter)

    Name
    Address
    PAN No Category
  • Income and Arrears for 2005-06

    Enter Net Taxable Income for 2005-06 (as per ITR/Form-16)
    Enter portion of arrears received in 2021-22 which relates to 2005-06
  • Income and Arrears for fy 2006-07

    Enter Net Taxable Income for 2006-07 (as per ITR/Form-16)
    Enter portion of arrears received in 2021-22 which relates to 2006-07
  • Income and Arrears for fy 2007-08

    Enter Net Taxable Income for 2007-08 (as per ITR/Form-16)
    Enter portion of arrears received in 2021-22 which relates to 2007-08
  • Income and Arrears for fy 2008-09

    Enter Net Taxable Income for 2008-09 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2008-09 **
    Enter portion of arrears received in 2021-22 which relates to 2008-09
  • Income and Arrears for fy 2009-10

    Enter Net Taxable Income for 2009-10 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2009-10 **
    Enter portion of arrears received in 2021-22 which relates to 2009-10
  • Income and Arrears for fy 2010-11

    Enter Net Taxable Income for 2010-11 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2010-11 **
    Enter portion of arrears received in 2021-22 which relates to 2010-11
  • Income and Arrears for fy 2011-12

    Enter Net Taxable Income for 2011-12 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2011-12 **
    Enter portion of arrears received in 2021-22 which relates to 2011-12
  • Income and Arrears for fy 2012-13

    Enter Net Taxable Income for 2012-13 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2012-13 **
    Enter portion of arrears received in 2021-22 which relates to 2012-13
  • Income and Arrears for fy 2013-14

    Enter Net Taxable Income for 2013-14 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2013-14 **
    Enter portion of arrears received in 2021-22 which relates to 2013-14
  • Income and Arrears for fy 2014-15

    Enter Net Taxable Income for 2014-15 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2014-15 **
    Enter portion of arrears received in 2021-22 which relates to 2014-15
  • Income and Arrears for fy 2015-16

    Enter Net Taxable Income for 2015-16 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2015-16 **
    Enter portion of arrears received in 2021-22 which relates to 2015-16
  • Income and Arrears for fy 2016-17

    Enter Net Taxable Income for 2016-17 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2016-17 **
    Enter portion of arrears received in 2021-22 which relates to 2016-17
  • Income and Arrears for fy 2017-18

    Enter Net Taxable Income for 2017-18 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2017-18 **
    Enter portion of arrears received in 2021-22 which relates to 2017-18
  • Income and Arrears for fy 2018-19

    Enter Net Taxable Income for 2018-19 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2018-19 **
    Enter portion of arrears received in 2021-22 which relates to 2018-19
  • Income and Arrears for fy 2019-20

    Enter Net Taxable Income for 2019-20 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2019-20 **
    Enter portion of arrears received in 2020-21 which relates to 2019-20
  • Income and Arrears for fy 2020-21

    Enter Net Taxable Income for 2020-21 (net taxable income as per ITR/Form-16)
    Enter IT Relief deducted/claimed if any for any other arrears under Section 89 from the Income tax during 2020-21 **
    Enter portion of arrears received in 2021-22 which relates to 2020-21
  • Income for fy 2021-22

    Enter Net Taxable Income for 2021-22 without including arrears of previous years received in the financial year 2021-22 for which relief under section 89 is intended to be claimed

**Income Tax Relief under Section 89 availed in the previous years is required to find out actual tax liability in the previous years. If you have not availed any IT relief under section 89 in these years or the same is not known, ensure that these fields are entered with numerical zero

Worksheet on Distribution of Arrears to previous years and Income Tax Relief Calculation

Distribution of Arrears to previous years
Previous Year(s) Net Taxable income of previous years Distribution of arrears received in the current year to the relevant years

Total income with arrears during the relevant years (2+3)

Tax on total income without latest arrears distributed (tax on 2) Tax on total income with latest arrears distributed (tax on 4) Difference in tax during relevant years on account of arrears (6-5)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
Total difference in Tax on account of arrears after distributing arrears to relevant years (A)
Calculation of Income Tax Relief under Section 89 for arrears received during the current year
Net Taxable Income for the current year without arrears Total arrears received during the current year Total income with arrears Tax on income without including arrears Tax on total income including arrears Difference in Tax on account of including arrears with income during the current year (B)
Relief under Section 89 [B-A] Rs.