Section 89/ Form 10e

Arrears is a legal term for the part of a debt that is overdue after missing one or more required payments, for example a tenant who has not paid rental due for 30 days is said to be one month in arrears. The amount of the arrears is the amount accrued from the date on which the first missed payment was due. … Employees’ salaries are usually paid in arrear.

An Income Tax Form 10e is a form that is essential to save taxes on the income generated as arrears by utilizing the provisions given by Section 89(1) of the Income Tax Act of 1961. This article talks about Form 10E and how one can reduce their tax liability by filing the same.

Section 89(1) – Relief of Salary. Tax is calculated on your total income earned or received during the year. If you have received any portion of your ‘salary in arrears or in advance’, or you have received family pension in arrears, you are allowed some tax relief under section 89(1).

To save you from any additional burden of tax due to delay in receiving income, the tax laws allow a relief under section 89(1). In simple words, you do not pay more taxes if there was a delay in payment to you and you were in a lower tax bracket for the year you received the money.

If arrears are received in financial year FY 2017-18, choose assessment year as AY 2018-19. Form 10E has to be submitted online and no copy is required to be attached with your tax return. However, you must file and keep all documents safely in your records.

Form 10E filing procedure in 4 Simple Steps:

1. Go to

2. Login with your ‘User ID’ (i.e. PAN), ‘DOB’ and ‘Password’.

3. Now click on tab titled ‘e-File’

4. Select ‘Prepare & Submit Online Form (Other than ITR)’ from the drop-down menu.

 Bonus is taxable in the year of receipt if it has not been taxed earlier on due basis. While contractual bonus is regarded as salary; gratuitous bonus is taxable as perquisite. If bonus is received in arrears, the assesses can claim relief in terms of section 89.

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