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Wednesday, December 30, 2009

Income tax rules form 10E

Rule 21A of Income Tax Rules 1962 - Form 10E








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 yearsDistribution 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)
2005-06134080756514164534764248772
2006-0712237031662154032228259223640
2007-089225029595121845012211221
2008-0921586012686228546678480911307





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