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| Home » Income Tax System in India » Income Tax Rebates » Section 89(1) |
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Section 89(1) |
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Section 89(1) of Income Tax act allows an assessee to get relief if he has received a salary in arrear or in advance. He is also entitled for Income Tax Rebate under Section89(1) in case he receives salary in one financial year for a period exceeding 12 months or a family pension in arrears.
The rebate in income tax under Section 89(1) is meant to reduce the possible hardship. The hardship may be caused due to such amounts received being taxed at more high rate than at which he would have been assessed otherwise normally.
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Rule 21A of the Income-Tax Rules that deals with the calculation of relief under Section 89(1) makes sure that the relief which is being available is a case where the payment is in the nature of compensation received by the assessee from his present employer or former employer. The case may also be in connection with the termination of his employment after prolonged service for not less than three years and where the valid portion of his term of employment is also not less than three years
The relief under Section 89(1) which is read with Rule 21A(1)(c) is available in respect of compensation received in connection with termination of employment. But this is available after a continuous service of more than three years and where the unexpired portion of the term of employment is three years or more.
Rebate in income tax under Section 89(1) can be granted at the time of TDS by employees of all companies co-operative societies, universities or institutions and also government and public sector undertakings. The employee can claim the relief in Form No.10E and should be in accordance with terms explained in Rule 21A of the Income Tax Rules.
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