• Exemption u/s 89(1)

I am a retired air force officer who receives defense pension.  On certain revision of pension rules by the government I received arrears of pension amounting to Rs. 10,86,984/- on 22 Nov 2016.  My taxable income is already more than Rs. 10 lakhs.  Therefore this arrears of pension will fall fully in the 30% tax bracket.

These arrears pertain to a 10 year period from FY 2005-06 to FY 2014-15.

I asked my tax consultant to claim exemption u/s 89(1).

My tax consultant calculated the relevant figures and said, "There will be a relief only if there is a change in the rate of tax without any change in the slabs. From AY 2007-08, there has been a change in the Income tax rates as well as the slabs. Therefore, the relief to be claimed u/s 89(1) for the AY 2017-18 is Nil."

I do not think what my tax consultant has said above is correct.  I wish to seek your professional opinion on this matter.  I am willing to pay for your services.  I can send you full particulars (in Excel format) of the calculations sent to me by my tax consultant by Email.

Kindly advise.  Regards.

Group Captain VK Vidyadhar (Retd)
Asked 7 years ago in Income Tax

Dear Sir,

Request you to email the excel sheet at

Thanks and Regards

Abhishek Dugar


Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0


Your query regarding calculation of relief u/s 89(1) we will need to calculate tax on the basis of receipt basis and on accrual basis of the years for which arrears salary has been received. If the tax calculation on receipt basis is more than due relevant year basis only then relief is available u/s 89(1). It would be really helpful to calculate if you could provide the details of your salaries and the arrears so that a calculation can be made accordingly.

You may write to me at ria@manishnagpalandco.com



Ria Nagpal
CA, Ahmedabad
49 Answers
5 Consultations

5.0 on 5.0

Hi uncle,

here is the site,

which help you in clarifying your doubts and help in calculating tax relief.

kindly have a look-


Vishakha Agarwal
CA, Bangalore
448 Answers
85 Consultations

5.0 on 5.0

Dear Sir,

Request you to send the Excel Sheet by Email to pradeep@capradeepbhat.com

That will help me in analyzing the case and giving correct advice.

Pradeep Bhat
CA, Bengaluru
542 Answers
94 Consultations

5.0 on 5.0

Dear Sir

In response to your query i wish to tell you the provisions of Income Tax Act,1961 in layman terms.

1. The Amount of salary received(in your case pension) as arrear which pertains to previous years will be taxable in year of receipt. However you will be allowed relief under section 89(1) if your tax liability in the year in which it is received is more than tax liability to year to which it pertains.

2. You Also need to file form 10E Along with your return to claim relief under 89(1).

3. It is Immaterial Whether there is change of slab or change in tax rate,the fact which is to be seen in this matter is tax liability.

feel free to Write at cavimalarora1@gmail.com

Disclaimer: The Above Advice is solely given to the facts presented on question.

Deepak Arora
CA, Rudrapur
5 Answers
1 Consultation

4.5 on 5.0


Vishrut Rajesh Shah
CA, Ahmedabad
928 Answers
39 Consultations

5.0 on 5.0

Hello Sir,

All that is said by your tax consultant is irrelevant. You can very claim the benefit of Section 89(1) if your tax slab changes and there is a slight opportunity of saving taxes.

I assume there might be a miss communication between you two. Do let me know if you need any further suggestions.

I cannot share my email id on a public portal, if you need any further help just drop your email id here and I shall send you a test mail.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.


Rohit R Sharma


Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

hope your query is answered . For more info mail at modani005@gmail.com

Shyam Sunder Modani
CA, Hyderabad
1408 Answers
164 Consultations

5.0 on 5.0

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