Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 How to Change Current Period in Tally Prime Step-by-Step Guide for Users
 Global Payroll Management with Tally Prime: How International Businesses Use It Beyond India
 How to Manage B2B HSN Codes in Tally Prime: A Complete Guide for Businesses
 How to Check Business Revenue in Tally Prime: A Complete Step-by-Step Guide
 MSME Payment Rule in Tally Prime: Understanding the Law and Its Impact on Businesses in 2025 The MSME (Micro, Small and Medium Enterprises) Payment Rule is a legal framework introduced under th
 Multipurpose Empanelment Form (MEF) 2025 26 Meaning, Purpose, and How to Manage It in Tally Prime
 GST Appellate Tribunal (GSTAT) Structure, Powers, and Its Relevance in Tally Prime Implementation
 How Tally Prime Supports the Real Estate & Construction Industry in India
 Comparison Between Tally Prime 6.1 and Tally Prime 6.2
 How Tally Prime Renewal Helps Save My Data
 Where to Buy Tally Prime 7.0 at the Best Rates Possible

Row over taxing arrears cloud Pay Panel beneficiaries
September, 05th 2008

It's a tussle that does not augur well for millions of Central government employees who are waiting for the arrears of the 6th Pay Commission award. The disagreement is over how to tax the arrears of the Pay Commission award; 40% of which will be received by employees with the next month's pay.

The taxation of the arrears will depend on how much of the arrears will be paid out this fiscal. As per the notification and the announcement in the Cabinet, only 40% of the arrears from January 1, 2006 will be paid out.

The Central Board of Direct Taxes has the Expenditure Secretarys locus standi on talking on taxation issues. Also as per the Income Tax Act, not only that part of income tax which is received, but that part of income is also taxed which is accrued. So one may receive 60% of the arrears maybe in the next fiscal but that doesnt stop the Income Tax Act from taxing the arrears. So there is this major disagreement there.

The tax experts have also brought in something called the Accounting Standard 9 which talks about revenue recognition. They are also in an agreement with the CBDT saying the revenues are recognized on an accrual basis in India; not so much in cash spaces. This essentially means, even if you receive 60% of the arrears next year, you could be taxed on that. The jury is still out on that and the fate of millions of government employees hangs in balance. If this tussle is not sorted out, it may have serious political repercussions.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2025 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting