Section 89(1) Relief Calculator
Got salary arrears or advance salary this year? Work out your tax relief under Section 89(1) live — the exact 5-step Form 10E method, using old-regime slabs.
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Enter your figures — the result on the right updates as you type.
The 5-step Section 89(1) computation
Form 10E worksheet| Step | Amount |
|---|
Get Form 10E filed & your relief claimed by a CA
We prepare Form 10E, submit it on the portal before your ITR, and claim your full Section 89 relief.
Disclaimer: Indicative estimate for a resident individual under the old regime. Actual relief may vary with exemptions, deductions and special-rate income. Form 10E must be filed on the income-tax portal before your ITR or the relief is disallowed.
What is Section 89(1) relief?
When you receive salary arrears or advance salary in one year, your income for that year is pushed into a higher slab and you pay more tax than you would have if the money had been taxed in the years it actually relates to. Section 89(1) undoes this bunching: it lets you claim relief for the extra tax caused purely by receiving the arrears in a lump sum. The relief also covers gratuity, commuted pension and compensation on termination.
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Worked example — the default figures
Current-year income including arrears ₹12,00,000, of which ₹2,00,000 is arrears; the previous year to which the arrears relate had income of ₹6,00,000. Each tax figure below includes the 4% cess. This is exactly what the calculator computes above.
| Computation | Amount |
|---|---|
| ATax on ₹12,00,000 (current, incl. arrears) = 12,500 + 1,00,000 + 60,000 = 1,72,500 + 4% cess | ₹1,79,400 |
| BTax on ₹10,00,000 (current, excl. arrears) = 12,500 + 1,00,000 = 1,12,500 + 4% cess | ₹1,17,000 |
| Tax on arrears in the current year (A − B) | ₹62,400 |
| CTax on ₹6,00,000 (previous year, without arrears) = 12,500 + 20,000 = 32,500 + 4% cess | ₹33,800 |
| DTax on ₹8,00,000 (previous year, with arrears) = 12,500 + 60,000 = 72,500 + 4% cess | ₹75,400 |
| Tax on arrears if taxed in the original year (D − C) | ₹41,600 |
| 5Relief u/s 89(1) = (A − B) − (D − C) = 62,400 − 41,600 | ₹20,800 |
Key terms explained
Form 10E
The mandatory online form for claiming Section 89 relief. It must be filed on the income-tax e-filing portal before you file your ITR. Skip it and the assessing officer will disallow the relief, even if the maths is correct.
What qualifies
Relief applies to salary arrears, advance salary, arrears of family pension, gratuity, commuted pension and compensation on termination — any income received in a lump sum that relates to earlier years.
Why relief arises
The lump sum pushes your current-year income into a higher slab. Relief equals the extra tax caused only by that bunching, computed by comparing tax "with vs without" the arrears in both years.
When relief is nil
If the tax on the arrears in the current year is equal to or lower than what it would have been in the original year, (A − B) − (D − C) is zero or negative and no relief is available.
Questions people ask
Short answers on Section 89(1) Arrears Relief. Tap a question to open it.
01What is relief under section 89(1)?
Relief for the extra tax caused by receiving salary arrears, advance salary or certain other lump sums in one year, when the income actually relates to earlier years. It puts you roughly where you would have been had the amounts been taxed in the correct years.
02How is the relief computed?
In five steps: tax on total income of the year of receipt including the arrears; tax excluding them; tax for each earlier year including the relevant arrears; tax for those years excluding them; and the relief is the difference between the two differences.
03What form must be filed?
Form 10E, filed on the e-filing portal before the return. A claim made without filing Form 10E is routinely disallowed at processing, and the demand then has to be rectified.
04Which receipts qualify for relief?
Salary arrears or advance, gratuity in specified circumstances, compensation on termination, commuted pension and family pension arrears. Not every lump sum qualifies — the section lists what does.
05Is section 89 relief available under the new regime?
Yes. Section 89 gives relief from tax rather than a deduction from income, so it is available under both regimes.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.