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‘Arrears to be taxed only after payment’

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September 4th, 2008 · No Comments

The government today clarified that the arrears accruing from the pay hike recommended by the Sixth Pay Commission would be taxed as and when it was given and not in a lump-sum. The Statesman writes “The income tax as due can only be deducted on the income earned in a particular year,” a finance ministry official said, refuting reports that 100 per cent tax would be collected this year even though the arrears would be split into two installments of 40 per cent this year and 60 per cent next fiscal.
Stating that no special dispensation would be made for government employees, the official said tax would be levied when a payment was made on a person’s total income that year. There would be no advance tax.
The ministry also sought to dispel the feeling that defence personnel would get a lower pay scale as compared to their civilian counterparts. READ MORE…

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