Tax Relief under section 89(1)

In the case of individuals, filing tax returns is mandatory only if there is taxable income or if the conditions realting to payments towards credit cards etc are applicable . Non filing of returns is, in my opinion, not an isssue for claiming rebate u/s 89(1).

If the arrears include the years for which you declared pension income, then take the same amount as received during those years for the purpose of computation of rebate u/s 89(1) and make suitable adjustments in the subsequent years. Then work out the rebate u/s 89(1). Now work out the rebate by taking correct amount. Claim the rebate which is less under both these scenarios. This is to err in favour of revenue as there may not be signifcant difference in claiming the rebate claimable and claimed. 

Please submit 10E to the Pension office to consider the rebate while deducting tax on pension amount.  If its not considered by the Pension Office for any reason, you may file it on or before filing your IT Return by the due date. 

10E will be considered while processing the return by the CPC. 

You may file form 10E for claiming the relief in the year of receipt. Since you have received the entire amount in FY 2023-24, you may claim the relief for that year. You may compute the reliefs year wise in the form.

She can claim benefit of relief u/s 89(1) even though ITR was not filed for the arrear period. You can claim it while filing her ITR for A.Y. 2024-25. File Form 10E before filing of ITR

For detailed discussion you may opt for phone consultation

To address the situation regarding your mother's eligibility for tax relief under Section 89(1) for the arrear pension received, here's a more detailed plan:

1. Eligibility for Tax Relief under Section 89(1):

• Your mother is eligible to claim tax relief under Section 89(1) for the arrear pension received, despite not having filed ITRs for certain assessment years from A.Y. 2005-06 to 2008-09. The relief is applicable because it's designed to mitigate the tax burden due to lump-sum arrear payments that pertain to multiple years.

2. Filing Form 10E:

• Form 10E must be filed to claim relief under Section 89(1) before filing the income tax return for A.Y. 2024-25. This form is filed through the Income Tax Department's e-filing portal.
• It's crucial to accurately report the income for the relevant years in Form 10E. Given the court documentation confirming no pension receipt from 1 Aug 2004 to 20 Aug 2014, adjust the reported pension income accordingly.

3. Addressing Past Inaccuracies:

• For the assessment years where income was inaccurately reported (e.g., A.Y. 2012-13), ensure that Form 10E reflects the actual situation. If pension income was not received during those years, it should be reported as such, even if this means indicating zero pension income for those periods.
• Correcting these inaccuracies is essential for an accurate computation of tax relief under Section 89(1).

4. No Prior Approval Needed:

• There's no requirement for prior approval from the Income Tax Department for the relief claimed via Form 10E. The form's submission is part of the tax filing process, and the claim for relief will be automatically considered during the assessment of the ITR.

By carefully addressing these steps, you can navigate the process of claiming tax relief under Section 89(1) for your mother's arrear pension in a manner that is both compliant and beneficial.

For detailed, personalized advice, consider a phone consultancy.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal