Question
What is Section 89(1) relief on salary arrears, and how do I file Form 10E?
Answer
Bottom line: Section 89(1) relief removes the extra tax that arises when salary arrears are received in one lump — and you must file Form 10E online before your ITR to claim it.
1. What it does
It recomputes tax as if the arrears had been taxed in the years they related to, and gives you the difference as relief.
2. Form 10E
File it online on the e-filing portal before submitting your ITR. If you claim the relief without filing Form 10E, it is disallowed when the return is processed.
3. Both regimes
The relief is available under the new regime as well as the old.
Compute your relief with our Section 89(1) / Form 10E Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.