7th Pay Commission: You can get tax exemption on the outstanding salary under the 7th Pay Commission. Now whatever increase in DA will be implemented by the central government, it will be applicable from July 1, 2022. All employees as well as pensioners will get their arrears from July 2022 till the period the hike in DA is effective.
7th Pay Commission: After the implementation of the recommendations of the 7th Pay Commission, arrears of salary and allowances are paid to the Central Government employees from the date of implementation.
At present, Central Government employees and pensioners are drawing salary and pension as per the 7th Pay Commission matrix.
Past dues like salary arrears or pension amount paid in the current year may attract higher tax due to change in tax slabs.
However, Central Government employees who have received arrears of salary can claim relief under section 89 of the Income Tax Act.
Under section 89(1) of the Act, an assessee can claim tax relief for receiving salary in arrears or advance or family pension in arrears.
To claim relief, government employees will have to fill Form 10E online on the Income Tax e-filing portal.
Taxpayers claiming relief under section 89 without submitting Form 10E are likely to get a notice from the Income Tax Department.
After submitting Form 10E, it is also mandatory to mention the details under Tax Relief column in your ITR filing to get refund.
How to file Form 10E online?
Government employees can file Form 10E through the e-filing portal of the Income Tax Department.
Follow these steps
- Log on to http://www.incometax.gov.in
- Click on the e-File tab and select “Tax Exemption and Relief/Form 10E” from the list of forms.
- Select the assessment year and click on continue.
- Form 10E has 5 annexures for different types of arrears. You should select Annexure-I, which is for advance or arrears of salary.
- Form 10E will automatically calculate the amount of tax relief available under section 89.
- Once you have filed Form 10E, you must claim it in your Income Tax Return (ITR) filing to receive the money. Mention these details under the Tax Relief column in your ITR.
In early August, Minister of State for Finance Pankaj Choudhary informed the Lok Sabha that the Center was not considering setting up an 8th Pay Commission for central government employees.
In a written reply to a question, Choudhary said, “There is no such proposal under consideration with the government for constitution of 8th Central Pay Commission for Central Government employees.” That it can be implemented on 1 January 2026.
In order to compensate the Central Government employees for the fall in the actual value of their wages due to inflation, they are paid Dearness Allowance (DA) and the rate of DA is periodically revised every six months depending on the rate of inflation. is amended from time to time. India Consumer Price Index for industrial workers released by the Labor Bureau under the Ministry of Labor and Employment, he said.
The government had constituted the Seventh Pay Commission in February 2014. The recommendations of the panel were effective from January 1, 2016.
Lakhs of government employees may get a hike in their Dearness Allowance (DA) for the second half of this year. DA is announced twice a year in January and July.
It is being speculated that due to the rise in retail inflation, the government may factor in the DA amount.
The announcement regarding DA is generally made in March and September every year. However, for one and a half years after December 31, 2019, there was no increase or change in the DA amount due to the coronavirus pandemic.
The Finance Ministry had stopped the DA hike from January 2020 to June 30, 2021 due to the pandemic. The DA hike resumed in July last year.
Subsequently, based on the recommendations of the Seventh Pay Commission, the DA for all central government employees was increased from 17 per cent to 28 per cent in July 2021.
Later in October 2021, the DA was again increased by three percent and the increased amount also became effective from July 1, 2021.
Due to these two increases, from July 1, 2021, all government employees started getting DA at the rate of 31 percent.
After that, on January 1, 2022, an increase of three percent was announced in the DA, after which government employees are getting DA at the rate of 34 percent.
Now whatever increase in DA will be implemented by the central government, it will be applicable from July 1, 2022.
All central government employees as well as pensioners will get their dues till the period of effect of increase in DA from July 2022.
