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.
Section 89(1)
Portal incometax.gov.in
File when Before ITR
Cost Free
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 Type | Annexure | Eligible? | Notes |
|---|---|---|---|
| Salary / wage arrears | Annexure I | Yes | Most common — pending dues paid now for prior years |
| Advance salary | Annexure I | Yes | Salary received in advance for future periods |
| Family pension arrears | Annexure II | Yes | Pension dues for earlier years |
| Gratuity (excess over 10(10) exemption) | Annexure III | Yes | Taxable portion of gratuity for past service |
| Compensation on VRS (over ₹5L) | Annexure IV | Yes | Amount above the 10(10C) exemption |
| Commuted pension (non-govt, taxable part) | Annexure V | Yes | Portion not exempt under 10(10A) |
| One-time performance bonus / incentive | — | No | Current-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
Loginincometax.gov.in with PAN
→
Open the forme-File → Income Tax Forms → Form 10E
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Enter year-wise dataIncome with & without arrears
→
Auto-reliefPortal computes the relief
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Submit, 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.
| Step | Calculation |
|---|---|
| Step 1 | Tax on current-year income including arrears → Tax A |
| Step 2 | Tax on current-year income excluding arrears → Tax B |
| Step 3 | Tax A − Tax B = extra tax on arrears this year |
| Step 4 | Tax on each earlier year including its share of arrears → Tax C |
| Step 5 | Tax on each earlier year excluding arrears → Tax D |
| Step 6 | Tax C − Tax D = tax the arrears would have cost originally |
| Relief | If 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 →Government sourcesForm 10E & e-filing: incometax.gov.in · Relief: Section 89(1), Income-tax Act 1961 · Defective return: Section 139(9); revised return: Section 139(5) · Rule 21A & Rule 21AA — computation and Form 10E prescribed
People also ask
Form 10E — Frequently Asked Questions
Basics
What is Form 10E and when should I file it?
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.
Is Form 10E mandatory to claim Section 89 relief?
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.
Is there any fee to file Form 10E?
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.
Calculation
How is Section 89(1) relief calculated?
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.
When is there no relief under Section 89?
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.
Which Assessment Year do I select in Form 10E?
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.
Eligibility
What types of income qualify for Section 89 relief?
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.
Does a performance bonus qualify for Form 10E relief?
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.
Can pensioners file Form 10E?
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.
With Employer & ITR
Does the employer include Section 89 relief in Form 16?
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.
How do I show the relief in my ITR after filing Form 10E?
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.
Which ITR form do I use when claiming Section 89 relief?
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.
Corrections
Can I file Form 10E after filing my ITR?
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.
What happens if I claim Section 89 relief without 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.
Is the relief different under the old and new tax regime?
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.
If you would rather not do it yourself
Related TaxClue services
Income Tax Return FilingCA-assisted ITR with Form 10E and Section 89 relief claimed correctly.See the service →ITR-1 (Sahaj) FilingFor salaried and pensioners with income up to ₹50 lakh.See the service →TDS on SalaryHow salary TDS, Form 16 and arrears interact for the year.See the service →Income Tax Notice HelpReply to 139(9) defective-return or demand notices on Section 89.See the service →
TaxClue for salaried taxpayers
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