Tuesday, November 24, 2015
Income tax on DR arrears from 1-8-1997 till date of settlement
Those who have received 20 % of DR arrears in accordance with the court order would have received a letter from LIC stating that the payment made towards 20 % of DR arrears will form part of the earnings and shall qualify for Income tax review for the financial year 2015-2016.
As per the IT ACT 1961 tax has to be paid on income earned irrespective of the year of receipt. However under SEC 89 any salary income received in lump sum that belongs to various years different from the year of receipt one can claim relief for the income so received. It is therefore imperative that LIC should give yearwise accrual of DR arrears when LIC settles the full 100 % DR arrears which we hope will be done before the current financial year ends and should it be delayed LIC should give year wise statement of the 20 % arrears of DR paid.
The respective associations should take up the matter with LIC.