ILLUSTRATION TO RE-ASSESS THE INCOME TAX OF THIS YEAR (FIN YEAR 2009-10) BY SUBMITTING FORM 10-E
As per Rule 21A of Income Tax Rules 1962, we can submit Form 10E as we have received pay commission arrears pertaining to the years 2005-06, 2006-07, 2007-08 and 2008-2009. (January 2006 to August 2008). An example is given below which explains the eligibility for getting relief.
IT PAYABLE IF FORM 10-E IS NOT SUBMITTED (TABLE A)
| Sl No | Details | Amount |
|---|---|---|
| 1. | Income chargeable under "Salaries" (including 60% of 6th Pay Commission arrears of Rs 81,508) | Rs 4,51,508 |
| 2. | Deductions under savings (Section 80C, 80CCC, 80CCD, 80D etc) | Rs 1,00,000 |
| 3. | Net Taxable income | Rs 3,51,508 |
| 4. | 10% Tax for below 3,00,000 | Rs 14,000 |
| 4. | 20% Tax for above 3,00,000 | Rs 10,302 |
| 4. | Tax Payable on Sl 3 | Rs 24,302 |
| 4 (a) | Education Cess | Rs 729 |
| 5. | Total Tax Payable | Rs 25,031 |
IT PAYABLE AFTER SUBMITTING FORM 10-E (TABLE B)
| Sl No | Details | Amount |
|---|---|---|
| 1. | Income chargeable under "Salaries" excluding the 60% arrears | Rs 3,70,000 |
| 2. | Deductions under savings (Section 80C, 80CCC, 80CCD, 80D etc) | Rs 1,00,000 |
| 3. | Net Taxable income | Rs 2,70,000 |
| 4. | Tax Payble on Sl 3 | Rs 11,000 |
| 4(a) | Education cess | Rs 330 |
| 5 | Total Tax Payable | Rs 11,330 |
| 6 | Excluding arrear amount for tax calculated as | Rs 13,701 |
| 6 | Tax Payable for previous year (After revising income of previous year - as per Form 10E) | Rs 6,940 |
| 8 | Relief eligible | Rs 6,761 |
How to calculate Income Tax 10E / 89(1) Relief
| Previous Year(s) | Net Taxable income of the relevant previous years | Distribution of 60% arrears 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) |
|---|---|---|---|---|---|---|
| 2005-06 | 134080 | 7565 | 141645 | 3476 | 4248 | 772 |
| 2006-07 | 122370 | 31662 | 154032 | 2282 | 5922 | 3640 |
| 2007-08 | 92250 | 29595 | 121845 | 0 | 1221 | 1221 |
| 2008-09 | 215860 | 12686 | 228546 | 6784 | 8091 | 1307 |
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