How To Fill Form 10E To Claim Relief Under Section 89(1)?

Section 89(1) of the Income Tax Act offers relief from receipt of past income in the current year. When you have received arrears salary pertaining to preceding financial years, it doesn't need to be taxed in both the years, if you file form 10E and claim relied under section 89.

To the extent tax is already paid on salary arrears, Any increase in the tax outflow due to an increase in slab rates in the year of receipt is allowed as relief under section 89(1).

What is Relief under Section 89(1)?

• Tax is calculated on your total income received during the year, and the effective tax rate increases as the income increases as per the slab rates. 
• 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.
• You don't have to be worried about higher tax that needs to be paid just because of addition of past dues in your total income. You can claim relief under section 89. 
• 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 the delay in payment to you.

What is Form 10E?

If an individual is eligible for tax relief under section 89 on salary received in arrears or advance, he/she must file Form 10E. It is mandatory to fill out Form 10E when an individual wants to claim tax relief under Section 89(1) of the Income Tax Act 1961. Section 89(1) provides tax relief for delayed salary received in the form of arrears or received a family pension in arrears.

Form 10E PDF Download

You can download Form 10E PDF here.

Who should file Form 10E?

An individual should file Form 10E if he/she has received the following income during the previous financial year:

• Arrears of salary
• Family pension in arrears
• Advance salary
• Gratuity
• Commuted pension
• Compensation on termination of employment

Note: Form 10E cannot be filed for persons who get their salary past dues due to voluntary retirement when exemption is claimed under section 10(10C).

How to File Form 10E?

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

Step 1: Log in to the e-Filing portal with your User ID and password.

Step 2: After you have logged in, click on the tab named ‘e-file’ and select the 2nd option ‘Income Tax Form’. Further, select ‘File Income Tax Forms’.

Step 3: Once you select ‘file income tax forms’, the below screen will appear with three options: (i) Person with Business/ Professional Income (ii) Person without Business/Professional Income (iii) Persons not dependent on any source of Income.

Step 4: Select the second option, Persons without Business/Professional Income. You will find the Form 10E link under this option.

Step 5: Select the assessment year for which you want to file Form 10E, you can select the Assessment year 2025-26 for Financial year 2024-25. 

Click on continue, next screen will appear and proceed with ‘Lets get Started’.

Step 6:  If you are filing Form 10E to claim relief on arrears of salary then you can select Annexure I or other relevant fields as applicable

Step 7 : Once you have filled up all the Schedule, You can proceed with filing of Form 10E

Income Tax Notice for Non-Filing of Form 10E

Starting from 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.

Important Points About the Form 10E

• Form 10E is mandatory for individuals claiming tax relief under Section 89(1).
• Form 10E cannot be downloaded and filed offline. It is completely online to be filled and submitted on the Income Tax portal.
• If a taxpayer has claimed tax relief under section 89(1) in the previous year but has not submitted Form 10E, he/she would receive a notice from the Income Tax Department for non-compliance.
• Taxpayers must file Form 10E online before filing their income tax return.
• The arrears on salary may pertain to earlier financial years, but taxpayers must choose the assessment year in which they have received the arrears while filling Form 10E.