7th Pay Commission: A Guide to Claiming Tax Relief on Arrears and Filing Form 10E

7th Pay Commission: According to the Income Tax Act of 1961, arrears and advances received by government employees as part of their salary are taxable. However, under Section 89, relief may be sought if certain conditions are met.

The deadline for filing the Income Tax Return for Assessment Year (AY) 2023-24 is rapidly approaching, and taxpayers should be aware of their tax obligations and have all necessary documents prepared. Section 89 of the Income Tax Act of 1961 allows government employees who receive salary advances or arrears to claim tax relief.

According to the Income Tax Act, arrears and advances received by government employees as part of their salary are taxable. However, under Section 89, relief may be sought if certain conditions are met.

To claim tax relief, the employees must submit Form 10E online through the e-filing portal. In accordance with Section 89(1), employees are entitled to deductions based on a recalculation of tax for both the year in which arrears are received and the year in which the income was earned.

How do you apply for Section 89 relief?

Form 10E must be submitted by any government employee who is entitled to claim exemption under Section 89. Form 10E cannot be downloaded; it must be filed online and submitted through the Income Tax e-filing portal.

In accordance with Section 89(1) of the Income Tax Act, relief may be requested for the following receipts:

• Paid either in arrears or in advance.
• Early Withdrawal from the Provident Fund Bonus
• Commuted pension value
• pension arrears for families
• The compensation received upon employment termination

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Methods for filing Form 10E

• To electronically file Form 10E prior to filing ITR, you must enter in to the e-filing portal at http://www.incometax.gov.in.
• After logging in, select the Tax e-file tab, then tap on Income Tax Forms and select File Income Tax Forms.
• A new tab will automatically open on the screen, where you must select the “Tax Exemptions and Revocation Form 10E” option. Additionally, you can search for Form 10E using the search bar.
• Select the assessment year and then click Continue.
• You will then be redirected to the Instruction Page, where you must select “Let’s Get Started”
• Proceed by selecting “Arrears Salary/Family Pension”.
• After entering all of the required information, select Preview.
• Then, select the Proceed to e-Verify button.
• You will be automatically redirected to the e-Verify page.
• Once the e-verification is complete, the screen will display the message “Submitted successfully.”