Have you received salary arrears due to delayed pay revision? And paying tax at higher tax slab because of the bulk amount being received in one go? Or would have paid tax at lower tax slab (5% or 20%), had the amount been received in the respective years? If yes, then you need to file Form 10E to claim a relief u/s 89 of Income Tax Act, 1961 at the time of filing Income Tax Return (ITR).
The relief u/s 89 can be calculated as –
A = Tax paid on Total Income (from all sources, including arrears) for the year in which arrears are received (-) Tax on Total Income (from all sources, excluding arrears) for the year in which arrears are received
B = Tax on Total Income (from all sources, including arrears) for the year to which arrears pertain to (-) Tax paid on Total Income (from all sources, excluding arrears) for the year to which arrears pertain to
Relief u/s 89 = A (-) B
To claim this relief, you need to submit Form 10E along with your Income Tax Return (ITR) for the year during which the arrears are received.
What details to be collected before starting to file Form 10E?
To begin with, download the intimation orders for all the Assessment Years to which the arrears pertain to.
- Login to income tax e-filing portal (https://eportal.incometax.gov.in/iec/foservices/#/login)
- Go to ‘e-File’, click ‘Income Tax Returns’, then click ‘View Filed Returns’
- Go to the relevant Assessment Year and click on ‘Download Intimation Order dated xxxx’
How to file Form 10E?
- Login to income tax e-filing portal (https://eportal.incometax.gov.in/iec/foservices/#/login)
- Go to ‘e-File’, click ‘Income Tax Forms’, then click ‘File Income Tax Forms’
- Go to tab ‘Persons without Business/Professional Income’
- Click on ‘Tax Exemptions and Relief (Form 10E)’
- Assessment Year – select current assessment year
- Click on ‘Continue’
- Click on ‘Let’s get started’
- Select applicable items regarding particulars of income – tick the option ‘Arrears Salary / Family Pension [Annexure I]’
- Click on ‘Continue’
- The form has 3 tabs – (1) Personal Information (2) Arrears Salary / Family Pension (3) Verification
Personal Information
- Check the personal information and click on ‘Save’
Arrears Salary / Family Pension
- Fill in the details as follows –
| 1 | Total taxable income (excluding salary / family pension received in arrears) | Total Income (from all sources) for current Assessment Year (-) Arrears received in the year |
| 2 | Salary / Family Pension received in arrears | Automatically calculated |
| 3 | Total income (as increased by salary / family pension received in arrears) [Add item 1 and item 2] | Automatically calculated |
| 4 | Tax on total income as per system calculation (as per item 3) | Automatically calculated |
| Tax on total income as per taxpayer (as per item 3) | Tax on total income (from all sources, including arrears) to be calculated as per applicable tax slabs for current Assessment Year. | |
| 5 | Tax on total income as per system calculation (as per item 1) | Automatically calculated |
| Tax on total income as per taxpayer (as per item 1) | Tax on total income (from all sources, excluding arrears) to be calculated as per applicable tax slabs for current Assessment Year. | |
| 6 | Tax on salary/family pension received in arrears [Difference of item 4 and item 5] | Automatically calculated |
- Table A – Details of salary / Family Pension received in arrears relating to different previous years
- Click on ‘Add Details’
| Previous year(s) | Year to which the arrears pertain to |
| Total income of the relevant previous year | ‘Aggregate Income’ as given in the ‘Intimation Order’ of the relevant previous year |
| Salary / Family Pension received in arrears relating to the relevant previous year as mentioned in column (1) | Arrears pertaining to the relevant previous year |
| Total income (as increased by salary received in arrears) of the relevant previous year mentioned in column (1) [Add columns (2) and (3)] | Automatically calculated |
| Tax on total income [as per column (2)] | ‘Net tax liability’ as given in the ‘Intimation Order’ of the relevant previous year |
| Tax on total income as per system calculation [as per column (4)] | Automatically calculated |
| Tax on total income as per taxpayer [as per column (4)] | Total Income (from all sources, including arrears) = ‘Aggregate Income’ as given in the ‘Intimation Order’ of the relevant previous year (+) Arrears pertaining to that year Tax to be calculated as per tax slabs applicable for that year |
| Difference in tax [Amount under column (6) minus amount under column (5)] | Automatically calculated |
- Click on ‘Add’
- After adding, the details will appear as follows
|
|
1 | 2 | 3 | 4 |
| Sl. No. | Previous year(s) | Total income of the relevant previous year | Salary / family pension received in arrears relating to the relevant previous year as mentioned in column (1) | Total Income (as increased by salary / family pension received in arrears) of the relevant previous year mentioned in column (1) [Add column (2) and (3)] |
| 1 | xxxx-xx | xx | xx | xx |
- Again, click on ‘Add Details’ if arrears are received for multiple previous years.
- Save entries for all the relevant previous years for which the arrears are received.
| 7 | Tax computed in accordance with Table 'A' [Brought from column 7 of Table 'A'] | Automatically calculated |
| 8 | Relief under section 89[Indicate the difference between the amounts mentioned against items 6 and 7] | Automatically calculated Note this figure for filling ITR |
- Click on ‘Save’
Verification
- Tick the checkbox and click on ‘Save’
Click on ‘Preview’ and check the filled details.
Click on ‘Proceed to E-verify’ and e-verify the form using any of the given options.
Where to enter the Relief details in Income Tax Return (ITR)?
- The Income Tax Return (ITR) has 5 tabs –
- Personal Information
- Gross Total Income
- Total Deductions
- Taxes Paid
- Total Tax Liability
- Fill the ITR to reach the tab ‘Total Tax Liability’
- Enter the amount of relief as noted from Form 10E under the head ‘Relief u/s 89 (Relief when salary, gratuity, etc. is paid in arrears or in advance)’
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