Your tax liabilities for a Financial Year are calculated from
the income earned by you during that year. Sometimes, that
income includes arrears (past dues paid in the current year).
Usually tax rates increase with time which means that you may
have to pay higher taxes in such case. However, Income Tax Act
provides you relief in those situations u/s 89(1). This is simply
based on the principal that you should be liable to pay the taxes
on your income based on the tax rates applicable for the year to which the income pertains.
If you have received any portion of your salary in arrears or in advance,
or you have received family pension in arrears, you can avail some tax
relief under section 89(1) read along with Rule 21A.
To claim relief u/s 89(1), you must file Form 10E. Taxpayers who claim
relief u/s 89(1) without filing Form 10E receive notice from the Income
Tax Department regarding the same.
Is it mandatory to file Form 10E:
From A.Y. 2015-16 the tax department has made it mandatory for
the person claiming the relief u/s 89 to file an online Form
10E on the tax department’s e-filing portal. Those who missed
or skipped to file this form were not allowed the relief while
processing their tax returns and may have even received the notice for non-filing of Form 10E.
Form 10E filing procedure:
You can e-file Form 10E by following 4 simple steps:
Go to https://incometaxindiaefiling.gov.in/
and login with your ‘User ID’
(i.e. PAN), ‘DOB’
Now click on tab titled ‘e-File’
and select ‘Prepare & Submit Online Form (Other than ITR)’
from the drop down menu.
Choose ‘Form 10E’
from the drop down menu, fill the relevant Assessment Year and press ‘Continue’
You will find the screen shown below with instructions to e-file Form 10E. Click on all the blue tabs one by one and fill relevant details. Click on ‘Submit’
once you are done to complete the process. In case if you are not able to complete the whole process at one go you can save the information filled by clicking on the ‘Save Draft’
button at the bottom of the screen and complete it any time later. In case if you have saved form 10E in draft you can complete it later by following the same process flow as stated above.