
The salary of bank employees has been increased as per 12th bipartite settlement signed on 8th March 2024. SBI and PNB have credited salary arrears to their employees and all other banks are expected to credit salary arrears to their employees soon. On the one hand, bank employees are happy for the increase in salary but on the other side, they are disheartened to pay such heavy taxes.
SBI PO Income Tax on Salary Arrears

PNB Scale 2 Income Tax on Salary Arrears

It is highly important to manage salary and invest in tax-saving funds. We are providing list of investments that can help you in saving income tax.
Here are some common ways to save income tax:
- Invest in tax-saving instruments: The government encourages citizens to invest in tax-saving instruments mentioned under Section 80C of the Income Tax Act. Some examples of tax-saving instruments include Public Provident Fund (PPF), National Savings Certificate (NSC), tax-saving fixed deposits, and equity-linked savings schemes (ELSS).
- Claim deductions: There are various deductions available under different sections of the Income Tax Act. For example, you can claim deductions for health insurance premiums paid under Section 80D, deductions for interest paid on education loans under Section 80E, and deductions for house rent allowance (HRA) under Section 10(14).
- Utilize exemptions: Certain exemptions can help reduce your taxable income. For instance, the House Rent Allowance (HRA) received by salaried individuals can be partially or fully exempt from tax, depending on certain conditions.
- Invest in tax-saving mutual funds: Tax-saving mutual funds, also known as ELSS, not only offer potential returns but also provide tax benefits. Investments in ELSS funds are eligible for deductions under Section 80C of the Income Tax Act.
- Utilize deductions for specific expenses: Certain expenses, such as donations made to eligible charitable organizations, can be claimed as deductions under Section 80G of the Income Tax Act.
- Utilize deductions for medical expenses: You can claim deductions for health insurance premiums paid under Section 80D of the Income Tax Act.
- Plan salary components: Optimizing salary components, such as reimbursements for medical expenses, conveyance allowances, and leave travel allowance (LTA), can help reduce taxable income.
- Utilize deductions for home loans: Deductions can be claimed for interest paid on home loans under Section 24(b) and for principal repayment under Section 80C of the Income Tax Act.
- Utilize deductions for education expenses: Deductions can be claimed for interest paid on education loans under Section 80E of the Income Tax Act.
- Plan investments and expenses: Careful planning of investments and expenses can help optimize tax savings. It is advisable to consult with a tax professional or financial advisor to understand the specific deductions and exemptions applicable to your situation.
Remember, tax-saving strategies should be implemented within the framework of the Income Tax Act and should align with your financial goals and risk appetite. It is recommended to consult with a tax professional or financial advisor for personalized advice based on your individual circumstances.
Perhaps, pay revision was due from November 2022, for the purpose of IT calculation salary arrear could be spread for each f/yr ie 2022- 2023 to 2023-2024, this will/may, in some cases, reduce the burden of income tax.