The deadline to file Income Tax Return for Assessment Year (AY) 2023-24 is approaching and the taxpayers should know their tax liabilities as well as keep required documents ready. Under Section 89 of the Income Tax Act, 1961, the government employees, receiving advances or arrears as a part of salary can claim tax relief.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Arrears and advances received by government employees as a part of salary are taxable as per the Income Tax Act. However, under Section 89 relief can be claimed if you fulfill certain conditions.

The employees, however, are required to file Form 10E online on the e-filing portal to claim tax relief. Under Section 89(1), deductions are allowed for employees by recalculation of tax for both years— the year in which arrears are received and the year in which the income was generated.

How to claim relief under Section 89?

A government employee who is entitled to claim exemption under Section 89 is required to submit Form 10E. The Form 10E cannot be downloaded, and one needs to file it online and submit it on the Income Tax e-filing portal.

Under Section 89(1) of the Income Tax Act, relief can be claimed for following receipts:

  • Salary received in arrears or in advance
  • Premature withdrawal from Provident Fund
  • Gratuity
  • Commuted value of pension
  • Arrears of family pension
  • Compensation received on termination of employment

Steps to file Form 10E

Step 1: In order to file Form 10E online before filing ITR, you need to log in to the e-filing portal- http://www.incometax.gov.in.

Step 2: Post-login, click on the tab that reads Tax e-file, then tap on Income Tax Forms and click on File Income Tax Forms.

Step 3: Automatically, a new tab will open on the screen, where you need to select the option that says, "Tax Exemptions and Revocation Form 10E”. You can also search for Form 10E in the search box.

Step 4: Now, you need to select the assessment Year (AY) and then click on Continue. 

Step 5: Next, you will be redirected to the Instruction Page, where you need to click on "Let's Get Started".

Step 6: Select "Arrears Salary/Family Pension" to proceed.

Step 7: After entering all the required details, click on Preview. 

Step 8: Then, click on the Proceed to e-Verify. 

Step 9: Automatically, you will be redirected to the e-Verify page.

Step 10: After completion of the e-verification, a message will appear on the screen saying, "Submitted successfully."