Taxpayers can claim relief under Section 89 of the Income-tax Act for salary arrears, advance pay, gratuity and certain other lump-sum payments. According to reports from Mint, these payments can increase tax liability by pushing up total income for a financial year. The income tax law allows eligible taxpayers to claim relief under Section 89, but this benefit is only available if taxpayers file Form 10E before submitting their income tax return (ITR).
All registered individual users on the e-filing portal can furnish particulars of their income in Form 10E for claiming relief as per Section 89 of Income Tax Act, 1961. As reported by Mint, taxpayers claiming this relief must file Form 10E before submitting their ITR if they have received any of the following: salary or family pension received in arrears (Annexure I), salary or family pension received in advance (Annexure I), gratuity for past services (Annexure II & IIA), compensation received from a current or former employer on termination of employment after continuous service of not more than 3 years (Annexure III), or commutation of pension (Annexure III).
According to the income tax department's website, taxpayers must follow specific steps to file Form 10E through the income tax e-filing portal. The form can only be submitted online and requires a valid PAN of the individual. As reported by Mint, once Form 10E is submitted after verification and acknowledgment is generated, it cannot be edited. The form has separate sections for different types of income and cannot be submitted without a valid PAN of the individual.
If taxpayers fail to file Form 10E but claim relief under Section 89 in their ITR, their income tax return will still be processed but the relief claimed under the relevant section will not be allowed, according to the income tax department's website. As reported by Mint, filing Form 10E is mandatory if taxpayers want to claim tax relief on their arrear or advance income, whichever is applicable. The form has been replaced by the newly introduced Form 39, but continues to be available on the income tax department's e-filing portal.
