Form 10E: Know About Tax Relief on Salary Arrears

Filing Income Tax Returns (ITR) is a responsibility for every citizen. It is a legal requirement by the government to assess the tax liability of people accurately and prevent evasion of tax. Form 10E is one provision, and you can file it to claim a deduction for the past year’s salary or arrears received in the current fiscal year. 

 

It provides tax relief to taxpayers in case of salary arrears or in case it is paid in advance. It is a mandatory requirement u/s 89 of the I-T Act, 1961. Since the applicable tax rate can change, it allows for income to get taxed at the tax rate applicable when it was earned and not at the tax rate that it was received.

Any individual who has received the following income in the previous financial year is eligible to submit Form 10E:

• Salary arrears

• Family pension arrears

• Gratuity

• Advance salary

• Employment termination compensation

Simplifying the process to file Form 10E, the income tax authorities have an online facility on the tax portal. Here are the steps to follow:

1. Visit and log in to the New Income Tax Portal with your credentials

2. Under the 'e-File' tab, choose 'Income-tax forms' and then click on 'File income tax form'

3. Now, click on Form 10E from the dropdown menu 

4. Choose the valid assessment year and click on 'Continue'

5. Click on 'Let's Get Started' on the 'Instructions' page

6. Choose the sections you need to fill and click on 'Continue'

7. After filling in all the details, click on 'Preview' and then choose the 'Proceed to e-Verify' option

8. You will be navigated to the ‘e-Verify’ page where you can check the details

 

After verification, you will get a success message with an acknowledgement receipt number and a transaction ID. Note these numbers for future reference. After submitting the form, you will receive a confirmation on your email ID and contact number.

You must remember the following points when filing Form 10E:

1. You need to file Form 10E before you file your ITR

Filing Form 10E will help you claim deductions for the past year’s salary or arrears in the current fiscal year. Failure to file this form will result in a higher tax liability.

2. Keep all supporting documents ready

Make sure to keep all the necessary documents handy before filing Form 10E. 

3. Make sure to provide the correct information

Incorrect information can lead to complications and can result in legal consequences or penalties. These documents will serve as proof when you claim a deduction u/s 89 of the I-T Act.

4. Use the new tax portal

The new portal is designed in such a way that it provides the taxpayers with a user-friendly experience. You can use this tax portal to file Form 10E as it is more efficient than the old tax portal.

5. Make a note of deadlines

Keep track of the deadlines for filing the 10E Form. This form has to be filed before the ITR filing due date.

 

Filing Form 10E is a vital step in claiming tax deductions for the past year’s salary or arrears received in the current fiscal year. With the introduction of the new tax portal, the process of filing this Form has become easier.