Since independence six Pay Commissions have been set up by the Government so far. Recommendations of each commission with retrospective effect have resulted in arrears of salaries. The rationale behind giving this relief under section 89 is that due to the payment of arrear or advance salary received in a given financial year, the income of the employee for that financial year gets increased due to the amount of the arrears or advances. Pay revisions particularly in Government Sector has become common. The relief under section 89(1) is allowable in the assessment year in which the arrears or the advance is received by the employee.

In all other cases, the assessee for claiming the relief should file an application in form 10E to his/her income tax assessing officer. As per Rule 21AA of the Income Tax Rules, 1962, Form 10-E has been prescribed for claiming the relief.Īccording to the said rule, in case the employee is a Government servant or is an employee in a company, cooperative society, local authority, university, institution or association of body, he/she may for claiming the relief submit the form 10E to his/her employer who is responsible for making the payment of the salary as referred to in sub section (1) of section 192 of the Income Tax Act, 1961

Excel Form 10E-Salary Arrears Relief calculator AY 2022-23 version 7.22 (FY 2021-22) for claiming rebate under section 89(1) of Income Tax Act 1961-DownloadĪs per section 89(1) of the Income Tax Act, 1961 relief for income tax has been provided when in a financial year an employee receives salary in arrears or advance.

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