Form 10E — Section 89(1) Tax Relief for Salary Arrears 2025-26

Updated: 3 June 2026 | Section 89(1), Income-tax Act 2025 | File Before ITR

Form 10E must be filed on the income tax e-filing portal to claim Section 89(1) relief on salary arrears, advance salary, or arrears of family pension. Filing Form 10E is mandatory — claiming relief in ITR without filing Form 10E first results in a defective return notice. Always file Form 10E before you file your ITR.

File First

Form 10E must be filed BEFORE filing ITR — not after.
Go to incometax.gov.in → e-File → Income Tax Forms → Form 10E. It takes 10 minutes and is completely free.

How to File Form 10E — Step by Step

Login to incometax.gov.in with your PAN and password
Go to e-File → Income Tax Forms → File Income Tax Forms
Search for Form 10E and click Proceed
Select the Assessment Year in which you received the arrears
Choose the type of arrears: salary arrears (Annexure I), gratuity, pension, etc.
Enter year-wise details: income of the year to which arrears relate, including and excluding the arrear amount
The system will automatically calculate the relief amount
Submit Form 10E — you will get an acknowledgement number
Now file your ITR and enter the relief amount in Schedule 89

Section 89(1) Relief — Calculation Method

Step	Calculation
Step 1	Tax on (current year total income including arrears) → Tax A
Step 2	Tax on (current year total income excluding arrears) → Tax B
Step 3	Difference: Tax A − Tax B = Tax on arrears in current year
Step 4	Tax on (income of arrear year including arrears) → Tax C
Step 5	Tax on (income of arrear year excluding arrears) → Tax D
Step 6	Difference: Tax C − Tax D = Tax on arrears if received in original year
Relief	If Step 3 > Step 6: Relief = Step 3 − Step 6. If Step 3 ≤ Step 6: No relief available

Income Types Eligible for Section 89 Relief

Income Type	Form 10E Annexure	Notes
Salary / wage arrears	Annexure I	Most common — pending dues from employer
Advance salary	Annexure I	Salary received in advance for future periods
Family pension arrears	Annexure II	Government pension to family members
Gratuity (excess over Section 10 exemption)	Annexure III	Gratuity above ₹20L
Compensation on VRS (excess over ₹5L)	Annexure IV	Golden handshake excess
Commuted pension (excess)	Annexure V	Non-government employees

Frequently Asked Questions

What is Form 10E and when should I file it?

Form 10E is filed to claim tax relief under Section 89(1) of the Income-tax Act when you receive salary arrears or advance salary that relates to earlier years. Filing Form 10E is MANDATORY before filing your ITR if you want to claim Section 89 relief. If you claim relief in ITR without filing Form 10E first, you will receive a defective return notice (under Section 139(9)) from the Income Tax department. File Form 10E on the e-filing portal at incometax.gov.in → e-File → Income Tax Forms → Form 10E. File before filing your ITR for that year.

How is Section 89(1) relief calculated?

Section 89(1) relief = (Tax computed by spreading arrears over previous years) vs (Tax computed by clubbing in current year). The calculation has 5 steps: (1) Compute tax on total income including arrears (current year); (2) Compute tax on total income excluding arrears; (3) Difference = tax attributable to arrears; (4) Compute tax on income in the year to which arrears relate, including arrears; (5) Compute tax on income in that year excluding arrears. If step 3 > step 5 difference, you get relief = step 3 minus step 5 amount. If step 3 ≤ step 5 difference, no relief is available. Form 10E does this calculation automatically.

What types of income qualify for Section 89 relief?

Section 89(1) relief is available for: Salary arrears (pending dues from previous years paid now); Advance salary (paid in advance for future periods); Family pension arrears; Gratuity not covered under Section 10(10); Commutation of pension not exempt under Section 10(10A); Sum received on voluntary retirement in excess of ₹5 lakh exemption. NOT eligible: bonus, incentive, or any other payment that is NOT salary arrears. One-time performance bonus paid in current year does not qualify — it must be genuinely "arrears" for a prior period.

Does employer include Section 89 relief in Form 16?

Yes, if you submit the Section 89 details to your employer before year-end, some employers include it in Form 16. However, this is NOT mandatory for employers. Many employers do not account for Section 89 relief while computing TDS. In such cases, you may have excess TDS deducted. File Form 10E on the income tax portal and claim the relief in your ITR — the TDS excess will be refunded. If your employer does include it, ensure Form 16 shows the relief amount and it matches Form 10E filed online. Always verify Form 26AS to confirm actual TDS deposited.

Can I file Form 10E after filing ITR?

No. If you already filed your ITR claiming Section 89 relief without first filing Form 10E, you will receive a notice u/s 139(9) calling the return defective. To correct this: File Form 10E on the e-filing portal → then file a revised return (u/s 139(5)) within the prescribed time. Time limit for revised return: 31 December of the assessment year (or before completion of assessment, whichever is earlier). If the revised return window has passed, you may need to respond to the defective return notice. Always file Form 10E BEFORE your ITR to avoid this issue.

File ITR ITR-1 (Salaried) TDS on Salary Form 16 Income Tax for Salaried Income Tax Notice Revised Return

◆ Available in 71 Cities

Form 10e Near You

Expert CA/CS assistance for form 10e across India. Click your city for local details.

→ New Delhi → Mumbai → Bengaluru (Bangalore) → Hyderabad → Chennai → Kolkata → Pune → Ahmedabad → Noida (UP) → Gurgaon (Gurugram) → Jaipur → Lucknow → Chandigarh → Surat → Kochi (Cochin) → Faridabad → Ghaziabad → Greater Noida → Panipat → Sonipat → Manesar (IMT) → Dharuhera → Mathura → Palwal → Agra → Kosi Kalan → Aligarh → Khair → Jewar (Noida International Airport) → Kanpur → Varanasi (Kashi) → Prayagraj (Allahabad) → Meerut → Bareilly → Moradabad → Gorakhpur → Firozabad → Saharanpur → Muzaffarnagar → Bulandshahr → Hapur → Karnal → Kurukshetra → Ambala → Hisar → Rohtak → Yamunanagar → Rewari → Bhiwani → Jodhpur → Udaipur → Kota → Ajmer → Bikaner → Ludhiana → Amritsar → Jalandhar → Patiala → Mohali (SAS Nagar) → Bathinda → Dehradun → Haridwar → Rudrapur → Shimla → Solan (Baddi-Barotiwala-Nalagarh) → Bhopal → Indore → Gwalior → Jammu → Srinagar → Panchkula

Ask Veda