Arrears of salary taxable?

Ask the Community Income Tax
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Hi members,

Are arrears of salary taxable?

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Hi Manjunath,

Yes, it will be taxable reason being this is also an income of any previous month which you paying incurrent month as an arrears.

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Tax is calculated on your total income earned or received during the year. If your total income includes any past dues paid in the current year, you may be worried about paying a higher tax on such arrears

To save you from any additional tax burden due to delay in receiving income, the tax laws allow a relief under section 89(1). Means you do not pay more taxes if there was a delay in payment to you and you were in a lower tax bracket for the year you received the money.

<<To claim the benefits under section 89(1), filing Form 10E is mandatory. You can file this form online on the income tax e-filing portal.

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