IT Form 10E Income Tax U/s 89 Relief - Clarifications on Submitting Form 10E to DDO

IT Form 10E  Income Tax U/s 89 Relief - Tips Clarifications on Submitting Form 10E to DDO. Let us discuss here on some hot issues regarding submitting form 10E to DDOs to claim Relief U/s 89(1) of Income Tax Act. There has been some rumors that, Form 10E should not be accepted by DDOs, they should be submitted while E-filing. Hence Let us get a clear idea on this matter, to whom the From 10E should be submitted to get the Tax Relief U/s 89(1). Let us see what the Income Tax Act Says on this regard. This post covers - Furnishing of particulars for claiming relief under section 89(1). Section - 89, Income-tax Act, 1961-2018,

IT Form 10E  Income Tax U/s 89 Relief - Tips Clarifications on Submitting Form 10E to DDO

To get a Clear idea , let us check all the Official releases from the Income Tax Department regarding Relief  U/s89 and submission of Form 10E. Form for furnishing particulars of income under section 192(2A) for the year ending 31st March of the concerned financial year, for claiming relief under section 89(1) by a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body

Form 10E Clarification as per Circular 1/2019 of CBDT- Ministry of Finance

The Rule 3.4 Relief When Salary Paid in Arrear or Advance: of the Circular 1/2019 of CBDT is as follows:
  1. 3.4.1 Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89 he may furnish to the person responsible for making the payment referred to in Para (3.1), such particulars in Form No. 10E duly verified by him, and thereupon the person responsible, as aforesaid, shall compute the relief on the basis of such particulars and take the same into account in making the deduction under Para(3.1) above.

Clarification for Section - 89, Income-tax Act, 1961-2018

B.—Relief for income-tax  Relief when salary, etc., is paid in arrears or in advance.
  1. 89. Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed:
  2. Provided that no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i) of clause (10C) of section 10, a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under clause (10C) of section 10 in respect of such, or any other, assessment year.

Rule-21AA, Income-tax Rules Furnishing of particulars for claiming relief under section 89(1).

  1. 21AA. Where the assessee, being a Government servant or an employee in a [company, co-operative society, local authority, university, institution, association or body], is entitled to relief under sub-section (1) of section 89, he may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the particulars specified in Form No. 10E.]

What does the Clarifications Page of Income Tax Website Says:

When relief under section 89 of the Income Tax Act is available?
  • Relief under section 89 is available to an individual if he has received
  • Salary or family pension in arrears or in advance [Rule 21A (2)]
  • Gratuity in excess of exemption under section 10(10)(ii)/(iii) [Rule 21A(3)]
  • Compensation on termination of employment [Rule 21A(4)]
  • Commuted pension in excess of exemption under section 10(10A)(i) [ Rule 21A(5)]
  • In case of payment received other than above CBDT can allow relief under section 89 after examining each individual case
Can my employer consider relief u/s 89 for the purposes of calculating the TDS from salary?

  • ​​​​​Yes, if you are a Government employee or an employee of a PSU or company or co-operative society or local authority or university or institution or association or body. In such a case you need to furnish Form No. ​10E to your employer
Are arrears of salary taxable?
  • ​​​​​​Yes. However, the benefit of spread over of income to the years to which it relates to can be availed for lower incidence of tax. This is called as relief u/s 89​ of the Income-tax Act.​​
From all the above clarifications, It is clear that When Salary Paid in Arrear or Advance, relief is admissible U/s 89 IT Act and Form 10E should be submitted to DDO. After that While E-filing of the Returns, One has to file Online Form 10E by the employee.

2 comments:

  1. excellent latest information. give an example of IT HOW and WHAT is the amount we are going to get refund with prc arrearas and without prc arrears

    ReplyDelete
  2. i am govt pensioner and i received DA arrears, can i apply for relief u/s 89(1)

    ReplyDelete