Have you received arrears or advance salary recently? Worried about the higher tax liability due to a sudden increase in income? If yes, then Section 10E of the Income Tax Act is something you must know about. This section provides a way for taxpayers to claim relief on arrears or advance salary through Form 10E, potentially saving a significant amount of tax.
What is Section 10E of the Income Tax Act?
Section 10E of the Income Tax Act deals with the provision of relief in cases where a taxpayer receives a portion of their salary in arrears or in advance, causing an abnormal increase in taxable income for a particular financial year. This often leads to higher tax slabs and unnecessary tax burdens.
To mitigate this, the Income Tax Act allows individuals to spread the income across relevant years and compute tax accordingly, which can help lower the overall tax payable.
The key tool for this purpose is Form 10E, which must be submitted online to claim this benefit.
Why is Form 10E Important?
Many taxpayers are unaware that receiving arrears or advance salary without filing Form 10E can result in losing the tax relief benefits under Section 89 of the Income Tax Act. Without proper submission, even if you are eligible for relief, the Income Tax Department will not process your claim.
Here’s why Form 10E is a mandatory form to file:"
- It is essential for claiming tax relief on arrears or advance salary.
- The Form 10E can be submitted through online mode only—there is no offline method accepted.
- This form acts as a Form for furnishing particulars of income under section 192(2A).
Employers and the Income Tax Department require this submission to validate the tax relief being claimed legally.
Who Should File Form 10E?
You need to file Form 10E if you have received:
- Salary arrears are due to the delayed payment of past years' salaries.
- Advance salary for future periods.
- Family pension arrears.
- Commuted pension in certain cases.
In any of these situations, Section 10E of the Income Tax Act allows you to seek relief under Section 89(1) by filing Form 10E.
How to File Form 10E Online? (Step-by-Step Guide)
Here’s a simple guide to file Form 10E online on the Income Tax e-filing portal:
1️⃣ Log in to the Income Tax e-filing portal using your PAN and password.
2️⃣ Go to e-File > Income Tax Forms > File Income Tax Forms.
3️⃣ Search for Form 10E and select the relevant assessment year."
4️⃣ Fill in the required details:
- Personal information.
- Salary arrears or advance details.
- Year-wise breakup of income.
5️⃣ Verify the form using Aadhaar OTP, Digital Signature, or EVC.
6️⃣ Submit and download the acknowledgement for your records.
👉 Remember: Form 10E is essential for claiming tax relief on arrears or advance salary—without this, your claim will be invalid.
Common Mistakes to Avoid While Filing Form 10E
- Not filing Form 10E before filing ITR when claiming relief.
- Entering incorrect income breakup for previous years.
- Missing assessment year selection.
Always double-check the figures and ensure proper submission on time.
Frequently Asked Questions (FAQs)
Q1. Is Form 10E mandatory?
✅ Yes, Form 10E is a mandatory form to file if you are claiming relief under Section 89.
Q2. Can I file Form 10E offline?
❌ No, Form 10E can be submitted only in online mode via the official e-filing portal.
Q3. What if I don’t file Form 10E?
❗ Your relief under Section 89 may be rejected, and you could end up paying higher taxes unnecessarily.
Q4. What is Form 10E used for?
📄 It is a Form for furnishing particulars of income under section 192(2A), allowing calculation of relief on salary received in arrears or advance.
Q5. Do I need to submit any physical documents?
🚫 No physical submission is needed. Everything is done digitally.
Conclusion
Section 10E of the Income Tax Act is a taxpayer-friendly provision that ensures you do not suffer higher tax just because of delayed salary payments or advances. Filing Form 10E correctly and on time ensures you receive the relief you deserve under Section 89.
In short:
- If you’ve received arrears or advance salary, Form 10E is essential for claiming tax relief on arrears or advance salary.
- Filing this form is simple, mandatory, and can save you from excess tax payments.
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