Form 10E is an important document that you should know about if you’re a salaried individual seeking tax relief. There are a few other things that you should also note carefully. This article lays down everything you need to know about Form 10E, Section 89 (1), and other crucial details.

Section 89 (1) – Why It Matters?

This is the section of the Income Tax Act that provides relief from past income receipts in the present year due to differences in tax rates between the year of receipt and the year to which the income pertains. This relief is ensured by recalculating the tax outflows on income arrears based on the applicable tax rates for both years. Tax outflow increases owing to the inclusion of arrears in the current year’s slab can be adjusted under Section 89 (1).

Thus, if your total income includes earlier dues paid in the present year, this section comes into play. If you have received a part of your salary as advance/arrears or a family pension as arrears, you can get tax relief under the same.

Knowing More About Form 10E

In case you are eligible to get tax relief on salary received in advance/arrears, then Form 10E has to be filed. It is compulsory to fill out this form whenever you want to claim relief under Section 89 (1). This offers relief for delayed salary paid as arrears or a family pension received similarly. It also applies to advance salary, commuted pension, gratuity, and compensation upon employment termination, provided the lump-sum receipt leads to a higher tax liability in the year of receipt.

Read More about the Difference between TDS and TCS

Filing Form 10E

You can file Form 10E online with these steps:

1. Login to the e-filing portal with your password and user ID.
2. Click on the e-file tab and choose the Income Tax Forms option. Then, select File Income Tax Forms.
3. Once you choose File ITR Forms, you will see options based on income sources. Select persons without business/professional income and find Form 10E under this category.
4. Select your assessment year and click Continue before choosing Let’s Get Started.
5. Depending on your income type, select Annexure I (for salary arrears) or other relevant annexures.
6. Fill in the required details based on the arrears or advance payments and submit the form online.

Some Other Vital Things to Consider

From FY 2014-15, the Income Tax Department has made filing Form 10E compulsory for those looking to get relief as per Section 89 (1). Those claiming the same but not filing the form may receive notices from the department as a result.

You cannot download this form and file it offline. It has to be filed online prior to submitting the income tax returns. Also, remember that Section 89 (1) does not offer any relief for VRS (Voluntary Retirement Scheme) compensation when an exemption has already been claimed under Section 10 (10C).

© Ruchi Verma

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