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Filing Form 10E is Mandatory to Claim Relief under Section 89(1)

Updated on:  

08 min read

Section 89(1) of the Income Tax Act offers relief from receipt of past income in the current year for any change in taxation laws. The relief is provided by recalculating the tax outflow on such arrears of income according to the taxation rules applicable in both the years, year of receipt, and the year to which the income pertains. Any increase in the tax outflow due to change in taxation rules in the year of receipt is allowed as relief under section 89(1).

Latest Update:
CBDT has issued a circular on 9th Sep 21 extending the timelines for certain direct tax compliances for AY 2021-22.
1. ITR Filing due date extension:
i) ITR filing by taxpayers not covered under audit is extended from 30th Sep 21 to 31st Dec 21
ii)  ITR filing for Tax audit cases is extended to 15th Feb 22 
iii) ITR filing for transfer Pricing is extended to 28th feb 22
iv) ITR filing of Belated or Revised Return for FY 20-21 is extended from 31st Dec 21 to 31st March 22

2. Furnishing Audit Report:
i) Due date to furnish the audit report is extended to 15th Jan 22
ii) Due date to furnish the audit report for transfer pricing cases is extended to 31st Jan 22

What Is Relief under Section 89(1)

Tax is calculated on your total income received during the year. If your total income includes any past dues paid in the current year, you may be worried about paying a higher tax on such arrears (usually tax rates have gone up over the years). To save you from any additional burden of tax due to delay in receiving income, the tax laws allow a relief under Section 89(1). If you have received any portion of your salary in arrears or in advance, or you have received a family pension in arrears, you are allowed some tax relief under Section 89(1) read along with Rule 21A.

In simple words, you are saved from paying more tax because of delay in payment to you.

You can read in detail about how to calculate relief under Section 89(1) – Here

Income Tax Notice for Non-Filing of Form 10E

Starting income tax returns for the Financial Year 2014-15 (The Assessment Year 2015-16), the Income Tax Department has made it mandatory to file form 10E if you want to claim relief under Section 89(1). Taxpayers who have claimed relief under Section 89(1) but have not filed form 10E have received an income tax notice from the Tax Department stating that – The relief u/s 89 has not been allowed in your case, as the online form 10E has not been filed by you. The furnishing of Online form 10E is required as per sec.89 of the Income Tax Act

How to File Form 10E

Form 10E can be filed online. Here are the following steps to file Form 10E online –

  • Login to https://incometaxindiaefiling.gov.in/ with your User ID and password along with the date of birth.
  • After you have logged in, click on tab named ‘e-file’ and select ‘Prepare & Submit Online Form (Other than ITR)’ The below screen shall appear.
  • Select Form 10E from the drop down.
  • The below screen shall appear with instructions on how to file form 10E and you keep on clicking on the blue tabs and enter the relevant information.

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