In continuation of Board’s letter of even number dated 22.03.2010, a copy of Ministry of Finance, Department of Revenue, Central Board of Direct Taxes letter No. 385/22/2010-IT(B) dated 08.12.2010 on the subject mentioned above is sent herewith for information and guidance.
F. No. 385/22/2010-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, the 8th December, 2010.
Sub:- Deduction of Income tax on amount of payment of arrears of 6th Pay Commission and arrears due to MACP-Claiming of relief under section 89(1) of the Income Tax Act, 1961-clarification thereof.
This is with reference to your letter dated 5.4.2010 on the issue of whether relief under Section 89(1) is to be allowed at the time of payment of arrears arising fro 6th Pay Commission. It is hereby clarified that the circular No. 9/08 dated 29.9.08 and letter dated 26.6.2009 of the Board were issued to basically convey that the tax on the arrears of amount of 60% which was not paid in the FY 2008-09 was not required to be deducted and paid from disbursed arrears of 40%. The clarification stated that the amount of 60% could not be brought to tax in AY 2009-10. It is hereby clarified that the aforesaid circular does not preclude the benefit of Section 89(1) to the employees which would continue to be available. It is also conveyed that the
relief under Section 89(1) is prescribed in Rule 21A and 21AA of the Income Tax Rules.
Railway Board Letter No
F(X)I-2010/23/3 dated 28.02.2011
Date
Circular Subject
Deduction of Income tax on account of payment of arrears of 6th Pay Commission and arrears due to MACP-Claiming of relief under section 89(1) of the Income Tax Act, 1961.