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Jul 26, 2025
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Form 10E: Why salaried employees must file this to get relief from tax on arrears
Why you need to claim Form 10E when you receive salary arrears
If you have received a salary hike or promotion with arrears—salary that should have been paid in the previous years—it can inflate your taxable income in the year you receive it. Unless you can claim tax relief, you may end up paying more tax than necessary. Enter Form 10E. It assists you in reducing your taxation by allowing you to claim relief under Section 89(1) of the Income Tax Act for advance or excess income.
How it reduces your tax burden
Tax in India is calculated through a slab system that is progressive in nature. If you are getting arrears for one year, your total income will go up—maybe pushing you into a higher tax slab than usual. But you did not earn the whole income in the said year. Form 10E allows the Income Tax Department to adjust the arrears to the years it was actually due in. This helps you to get relief from the additional tax due to bunching of income.
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