Next dueIncome Tax
21 OCTTax Audit Report · Form 3CA/3CB · AY 2026-27 · extended from 30 Sepin 3 days 7 NOVTDS / TCS deposit · Deducted in Oct 2026in 20 days 21 NOVITR filing · Audit cases · AY 2026-27 · extended from 31 Octin 34 days 15 DECAdvance Tax · 3rd (75%) instalment · FY 2026-27in 58 days 31 DECBelated / revised ITR · AY 2026-27in 74 days 20 OCTGSTR-3B · Summary return · Sep 2026in 2 days 30 OCTAOC-4 · Financial statements · FY 2025-26in 12 days 11 NOVGSTR-1 · Outward supplies · Oct 2026in 24 days
All due dates
Guide · Income Tax

Form 10E — Section 89(1) Relief on Salary Arrears

What Form 10E is, why it must be filed before your ITR, how Section 89(1) relief is calculated step by step, which incomes qualify, and how to file it on the e-filing portal.

Written by
TaxClue Income-Tax Desk
Updated
18 August 2026
Reading time
5 min
Questions
15 answered
  • Updated August 2026
  • CA Reviewed
  • File Before ITR
Quick Answer

Form 10E is a mandatory online form filed on incometax.gov.in to claim tax relief under Section 89(1) when you receive salary arrears, advance salary or arrears of family pension relating to earlier years. It must be filed before you file your ITR for that year — if you claim Section 89 relief in the return without first filing Form 10E, the relief is disallowed and you get a defective-return / demand notice. It is free and takes about 10 minutes.

File Form 10E FIRST — not after the ITR

This is the single most common error. Claiming Section 89 relief in the ITR without first filing Form 10E triggers a defective-return notice u/s 139(9) (or a demand in the 143(1) intimation). Always submit Form 10E, note the acknowledgement, and only then file the return.

What qualifies

Income Eligible for Section 89(1) Relief

Relief applies where a lump sum for an earlier period is taxed now and pushes you into a higher slab. Each income type maps to a Form 10E annexure.

Income TypeAnnexureEligible?Notes
Salary / wage arrearsAnnexure IYesMost common — pending dues paid now for prior years
Advance salaryAnnexure IYesSalary received in advance for future periods
Family pension arrearsAnnexure IIYesPension dues for earlier years
Gratuity (excess over 10(10) exemption)Annexure IIIYesTaxable portion of gratuity for past service
Compensation on VRS (over ₹5L)Annexure IVYesAmount above the 10(10C) exemption
Commuted pension (non-govt, taxable part)Annexure VYesPortion not exempt under 10(10A)
One-time performance bonus / incentive—NoCurrent-year bonus is not "arrears" of a prior period

Relief u/s 89 is not available against income that is already exempt, and does not apply to ordinary current-year bonus or incentive.

Step by step

How to File Form 10E on the e-Filing Portal

  1. 1Loginincometax.gov.in with PAN
  2. 2Open the forme-File → Income Tax Forms → Form 10E
  3. 3Enter year-wise dataIncome with & without arrears
  4. 4Auto-reliefPortal computes the relief
  5. 5Submit, then ITRNote ack., then claim in return
  • Form 16 / salary certificate showing the arrears
  • Break-up of arrears by the year(s) they relate to
  • Total income of each earlier year (from old ITRs / Form 26AS)
  • Correct Assessment Year selected (AY = FY + 1)
  • Right annexure for your income type
  • Form 10E submitted BEFORE the ITR
  • Acknowledgement number saved
  • Relief amount entered in the ITR (Schedule / relief u/s 89)
Which Assessment Year to pick

Select the AY in which you received the arrears — for arrears received in FY 2025-26, that is AY 2026-27. Inside Form 10E you then enter the earlier years to which the arrears relate, so the portal can spread the income and compute the relief.

Received arrears and not sure how to split them by year?

Get ITR Filing Help →
The maths

How Section 89(1) Relief Is Calculated

Relief equals the extra tax you pay now because arrears bunch into the current year, minus the tax those arrears would have cost had they been taxed in the years they actually relate to. Form 10E does this automatically once you enter the numbers.

StepCalculation
Step 1Tax on current-year income including arrears → Tax A
Step 2Tax on current-year income excluding arrears → Tax B
Step 3Tax A − Tax B = extra tax on arrears this year
Step 4Tax on each earlier year including its share of arrears → Tax C
Step 5Tax on each earlier year excluding arrears → Tax D
Step 6Tax C − Tax D = tax the arrears would have cost originally
ReliefIf Step 3 > Step 6, relief = Step 3 − Step 6; if Step 3 ≤ Step 6, no relief

Relief is capped at the excess tax — you cannot get back more than the extra tax the bunching caused.

✓Form 10E helps you if

  • Arrears pushed you into a higher slab this year
  • The earlier years had lower income / lower slabs
  • You received advance salary or pension arrears

!Relief may be nil if

  • You were already in the top slab in the arrear years too
  • The amount is a current-year bonus, not true arrears
  • Old and new years fall in the same slab (no bunching gain)
Avoid these

Common Form 10E Mistakes

  • Filing the ITR first — Form 10E must be submitted before the return, or the relief is disallowed.
  • Wrong Assessment Year — pick the AY of receipt, not the year the arrears relate to.
  • Claiming relief on a normal bonus — only genuine arrears of a prior period qualify.
  • Mismatched figures — the relief in your ITR must match the Form 10E computation.
  • Ignoring old regime vs new regime — compute the relief under the regime you actually file in.
Already filed the ITR without Form 10E?

File Form 10E now, then file a revised return u/s 139(5) — for AY 2026-27 that window runs up to 31 December 2026 (or before assessment, whichever is earlier). If a defective-return notice u/s 139(9) has been issued, respond within the time given after filing Form 10E.

Got a defective-return or demand notice on Section 89?

Talk to a Tax Expert →
Sources
  1. Form 10E & e-filing: incometax.gov.in
  2. Relief: Section 89(1), Income-tax Act 1961
  3. Defective return: Section 139(9); revised return: Section 139(5)
  4. Rule 21A & Rule 21AA — computation and Form 10E prescribed

Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.

People also ask

Form 10E — Frequently Asked Questions

Short, direct answers to the 15 questions readers ask most on this topic.

Form 10E is an online form on the income-tax e-filing portal used to claim tax relief under Section 89(1) when you receive salary arrears, advance salary or arrears of family pension relating to earlier years. It is mandatory to file Form 10E BEFORE filing your ITR for that year. If you claim Section 89 relief in the ITR without filing Form 10E first, the relief is disallowed and you may get a defective-return notice u/s 139(9) or a demand in the 143(1) intimation. File it under e-File → Income Tax Forms → Form 10E on incometax.gov.in.

Yes. Filing Form 10E is compulsory to claim relief under Section 89(1). Without it the relief claimed in the return is not allowed by the department. It is free to file and takes only a few minutes on the e-filing portal. Always submit Form 10E and note the acknowledgement before you file your ITR.

No. Form 10E is filed free of cost directly on the government e-filing portal at incometax.gov.in. You only need your PAN login and the year-wise details of your income with and without the arrears.

Relief equals the extra tax caused by bunching the arrears into the current year, minus the tax those arrears would have cost in the years they relate to. Step 1: tax on current-year income including arrears (Tax A). Step 2: tax excluding arrears (Tax B); A minus B is the extra tax now. Step 4-5: tax on each earlier year including and excluding its share of arrears; the difference is what the arrears would have cost then. If the current-year extra tax exceeds the earlier-year tax, the difference is your relief. Form 10E computes this automatically.

There is no relief if spreading the arrears back to earlier years does not reduce the total tax — for example, if you were already in the top slab in both the current year and the earlier years, or if old and new years fall in the same slab. In that case the extra tax now equals the tax the arrears would have cost originally, so the relief works out to nil.

Select the Assessment Year in which you received the arrears. For arrears received in FY 2025-26 the AY is 2026-27. Inside the form you then enter the earlier financial years to which the arrears relate, so the portal can allocate the income and calculate the relief correctly.

Section 89(1) relief covers salary arrears (Annexure I), advance salary (Annexure I), family pension arrears (Annexure II), taxable gratuity for past service over the 10(10) exemption (Annexure III), VRS compensation over the ₹5 lakh exemption (Annexure IV) and the taxable part of commuted pension for non-government employees (Annexure V). Ordinary current-year bonus or incentive does not qualify.

No. A one-time performance bonus or incentive paid for the current year is not arrears of an earlier period, so it does not qualify for Section 89(1) relief. Relief is only for genuine arrears — amounts that were due for prior years but paid to you now.

Yes. Pensioners who receive arrears of pension or family pension relating to earlier years can file Form 10E and claim Section 89(1) relief. Family pension arrears go under Annexure II. The process and the before-ITR filing rule are the same as for salaried taxpayers.

Only sometimes. If you submit the arrears and Section 89 details to your employer during the year, some employers factor the relief into TDS and reflect it in Form 16 — but this is not mandatory. Many employers deduct TDS without it, leaving excess tax that you recover by filing Form 10E and claiming the relief in your ITR. Always cross-check Form 16 and Form 26AS / AIS against the Form 10E you file.

After submitting Form 10E and noting the acknowledgement, file your ITR and enter the relief amount in the field for relief under Section 89 (in the Tax Paid / relief schedule). The amount must match the relief computed in Form 10E. It reduces your net tax payable or increases your refund.

Use the ITR form that matches your income profile — usually ITR-1 (Sahaj) for a resident with salary/pension and income up to ₹50 lakh, or ITR-2 if you have capital gains, more than one house property or foreign income. Section 89 relief can be claimed in either; filing Form 10E first is required regardless of which ITR you use.

You should not — Form 10E must come first. If you have already filed the ITR claiming Section 89 relief without Form 10E, file Form 10E now and then file a revised return u/s 139(5). For AY 2026-27 the revised-return window runs up to 31 December 2026 (or before assessment, whichever is earlier). If a defective-return notice u/s 139(9) has been issued, respond to it within the time allowed after filing Form 10E.

The relief is disallowed. You will typically receive a defective-return notice under Section 139(9), or the relief will simply be removed and an additional tax demand raised in the Section 143(1) intimation. To fix it, file Form 10E and then a revised return, or respond to the notice within the prescribed period.

The relief is computed under the regime in which you actually file. Because slab rates differ between the old and new regimes, the Section 89 relief amount can change depending on which regime you choose. Compute Form 10E on the same basis as the ITR you file, and compare both regimes before deciding.