Received salary arrears, advance salary or family pension arrears this year – and pushed into a higher slab because of it? Section 89(1) gives you relief for the extra tax, but only if you file Form 10E online before your return. This free CA-built calculator computes the relief exactly as Rule 21A(2) prescribes – recomputing each arrear year at that year’s actual slab rates (old or new regime, FY 2015-16 onwards, with the correct rebate and cess history) – and gives you the complete Annexure-I and Table A figures ready to copy into Form 10E.
1Year of receipt
2Arrear years – income as assessed and arrears allocable
How Section 89(1) relief works
Arrears are taxed in the year you receive them – which can push you into a higher slab than if the amounts had been taxed in the years they were due. Rule 21A(2) fixes this by comparing two numbers: the extra tax in the receipt year because of the arrears (Difference 1), and the extra tax that would have arisen in the arrear years had the amounts been taxed there (Difference 2). If Difference 1 exceeds Difference 2, the excess is your relief. Each year is computed at its own rates – which is exactly what this calculator’s built-in slab history (FY 2015-16 to FY 2025-26, both regimes, with the correct Section 87A rebate and cess for every year) does.
Filing Form 10E – the steps
| Step | Action |
|---|---|
| 1 | Compute the relief here and note the Annexure-I and Table A figures |
| 2 | e-filing portal – e-File – Income Tax Forms – File Income Tax Forms – Form 10E |
| 3 | Select the assessment year of receipt, choose Annexure-I (salary arrears / advance / family pension arrears), fill the figures |
| 4 | e-Verify and submit – BEFORE or along with filing the ITR |
| 5 | Claim the same relief figure in the ITR (Schedule – relief u/s 89) |
Frequently asked questions
Is Section 89 relief available under the new tax regime?
Yes – despite widespread confusion. Section 115BAC restricts only the listed deductions and exemptions, and Section 89 is not among them. The Income Tax Department’s own Form 10E utility computes receipt-year tax under the new regime from AY 2024-25 onwards. File Form 10E and claim the relief whichever regime you use.
What happens if I claim the relief without filing Form 10E?
Your return is processed but the relief is disallowed in the 143(1) intimation – a demand follows for the difference. Form 10E filing is mandatory since AY 2015-16.
Where do I get the year-wise break-up of my arrears?
From your employer’s arrears annexure or pay-fixation statement – it allocates the arrears to the years they relate to. That allocation drives Table A.
Does this cover family pension arrears too?
Yes – Rule 21A covers salary arrears, advance salary and family pension arrears, all through the same Annexure-I method. Gratuity for past service, termination compensation and commuted pension have their own annexures (II to IV) – not covered by this calculator.
My income in one of the years exceeds Rs 50 lakh. Anything to note?
Surcharge (and its marginal relief) then enters the computation for that year – this calculator adds cess but not surcharge, so for years above Rs 50 lakh have the figures verified by a professional or the portal utility before filing.
Can relief ever be nil even if I received large arrears?
Yes – if adding the arrears back to the earlier years would have cost as much or more tax there (Difference 2 is equal to or higher than Difference 1), no relief arises. That happens when the earlier years were already at the top slab.