Income tax relief for Advance Salary Received & on Arrears of Salary Received

• September 29, 2020
• CA Chandan Agarwal's Office

Income tax relief for Salary Received in Advance & on Arrears of Salary Received for earlier years

Any income due or received by an employee from his employer or former employer is taxable under the head `salaries’ as per the provisions of the Income Tax Act, 1961. It is pertinent to note that the salary earned in respect of a particular financial year is subject to tax as per the tax rates applicable for that financial year.

There are occasions when an employee may receive income in a particular financial year, which relates to earlier financial years, i.e., as arrears of salary or he may receive certain payments in advance for future financial years, i.e., as advance salary.

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