Income tax form 10E

When it comes to filing income tax returns, salaried individuals often look for ways to maximize their tax benefits. If you’ve received any arrears or advance salary during the financial year, Income Tax Form 10E becomes an essential tool for claiming tax relief under Section 89(1) of the Income Tax Act. Here’s everything you need to know about ITR Form 10E, its purpose, eligibility, and how to file it online.

What is Income tax Form 10E?

Income tax Form 10E is a mandatory document required to claim tax relief under Section 89(1). This section provides relief to taxpayers who experience a sudden tax burden due to arrears, salary advances, or family pension. Filing Form 10E ensures that your additional income is taxed in the financial year it pertains to, rather than lumped into the current financial year.

Who Should File Form 10E?

Salaried individuals are primarily required to file Form 10E if:

1. They received arrears of salary or advance salary.
2. They earned gratuity, commuted pension, or family pension.
3. They earned compensation for termination of employment.

Without filing Form 10E, your tax relief claim will be denied by the Income Tax Department.

Benefits of Filing Form 10E

1. Reduce Tax Liability: Spreads out the taxation impact of arrears or advances over the years to which they relate.
2. Compliance: Mandatory for claiming Section 89(1) tax relief while filing your ITR.
3. Fair Taxation: Ensures taxation aligns with the year of income accrual rather than the year of receipt.

Form 10E at a Glance

Form 10E has seven parts:

1. Annexure I – Arrears Salary / Family Pension received in arrears
2. Annexure I – Salary / Family Pension received in advance
3. Annexure II & IIA  – Payment in nature of Gratuity in respect of past services
4. Annexure III – Payment in nature of compensation from the employer or previous employer at or in connection with termination of employment after continuous service of not more than 3 years or where the unexpired portion of term of employment is also not less than 3 years.
5. Annexure IV  – Commutation of pension

Based on the nature of amount received, appropriate annexure needs to be selected while filing Form 10E.

Documents Required to File Form 10E

To file Form 10E accurately, you will need:

• Previour years returns relevant to AY in which Arrear/Advance/Gratuity/Compensation/Pension pertains to
• Salary slips of previous years if ITR is not filled
• Form 16 for the relevant AY in which Arrear/Advance/Gratuity/Compensation/Pension is received

Steps to File Form 10E Online

Filing Form 10E is a seamless process through the Income Tax e-filing portal. Follow these steps:

1. Login to the Income Tax e-Filing Portal:
   Visit www.incometaxindiaefiling.gov.in and log in using your PAN and password.

2. Navigate to Form 10E:

   • Click on e-File > Income Tax Forms > File Income Tax Forms.
   • Select Form 10E under the relevant assessment year.

3. Fill in the Form:

   • Provide details of arrears, advances, or other eligible incomes.
   • Calculate tax relief as per Section 89(1).

4. Submit the Form:
   After filling out all the necessary fields, cross-check the details and submit the form.

5. File Your ITR:
   Once Form 10E is submitted, you can file your Income Tax Return (ITR), ensuring you claim the relief in the appropriate section.

Key Points to Remember

• Filing Form 10E is mandatory for tax relief; otherwise, the Income Tax Department may reject your claim.
• Ensure all income details are accurately reported for past years to avoid discrepancies.
• Form 10E is required even if your employer has deducted TDS for arrears or advance salary.

Conclusion

Filing ITR Form 10E is essential for salaried individuals seeking relief under Section 89(1). By properly calculating and claiming your tax benefits, you can ensure compliance with tax laws and minimize your financial burden.

Consult a CA like us at +91 9769647582 for any assistance.

FAQs on ITR Form 10E for Salaried Persons

1. What is Form 10E?

In case of receipt in arrears or advance of any sum in the nature of salary, relief u/s 89 can be claimed. In order to claim such relief, the assessee has to file Form 10E. It is advisable that Form 10E be filed before filing of Income Tax Return.

2. Do I need to download and submit Form 10E?
No, there is no need to download Form 10E as the submission can be done online after log in to e-Filing portal.

3. When should I file Form 10E?
It is advisable that Form 10E be filed before filing your Income Tax Return.

4. Is Form 10E mandatory to file?
Yes, it is mandatory to file Form 10E if you want to claim a tax relief on your arrear / advance income.

5. What will happen if you fail to file Form 10E but claim relief u/s 89 in my ITR?
If you fail to file Form 10E but claim relief u/s 89 in your ITR, your ITR will be processed but the relief claimed u/s 89 will not be allowed.

6. How do I know that ITD has disallowed the relief claimed by me in my ITR?
In case the relief claimed by you u/s 89 is disallowed, the same shall be communicated by the ITD through an intimation u/s 143(1) after the processing your ITR is complete. 

7. How the system is calculating taxes?

For tax calculations related to A.Y. 2024-25 (F.Y. 2023-24) onwards, “system calculated tax” is  as per default tax regime i.e. new tax regime (Section 115BAC(1A)). However, tax calculations for prior years till A.Y. 2023-24 (F.Y. 2022-23) are as per old tax regime.