Important: You must file Form 10E online on the income tax portal BEFORE filing your ITR. If you claim Section 89(1) relief in your return without a filed Form 10E, the relief will be disallowed and a demand notice will be raised against you.

Received DA arrears, 7th CPC pay revision arrears, MACP fixation dues, or any bulk salary payment for prior years? You are probably paying more tax than you should. The SalaryBox Form 10E Calculator computes the exact tax relief you can claim under Section 89(1) of the Income Tax Act, 1961 (now Section 157 under the Income Tax Act, 2025 from tax year 2026-27). It generates Annexure-I and Table A figures ready to copy into the Form 10E utility on the income tax portal.

Works with both old and new tax regimes. Applies the correct slab rates, Section 87A rebate, and health and education cess for each financial year from FY 2015-16 onward.

What Is Section 89(1) Relief?

Section 89(1) of the Income Tax Act, 1961 provides tax relief when you receive salary in arrears or in advance, and the bulk receipt pushes your total income into a higher tax slab in the year of receipt. Without this section, you would pay more tax simply because of the timing of the payment — not because you earned more.

Section 89(1) corrects this inequity. It lets you recalculate the tax as if the arrears had been received in the years they actually relate to. If that spreading produces a lower total tax, the difference is the relief you can claim.

From tax year 2026-27 (FY 2026-27 / AY 2027-28), this provision is found in Section 157 of the Income Tax Act, 2025, which replaced the 1961 Act from 1 April 2026. The substance is identical — Section 157 mirrors Section 89(1) in structure and effect. For tax years up to FY 2025-26 (AY 2026-27), Section 89(1) of the 1961 Act applies.

When Do You Need This Calculator?

You need to calculate Section 89(1) relief whenever you receive any of the following in a single financial year.

DA arrears — the most common trigger for government employees, received as a lump sum covering several months. 7th CPC pay revision arrears — back-dated pay adjustments from pay fixation. MACP (Modified Assured Career Progression) fixation arrears. Court order arrears — salary restored following a favourable court judgment. Pay protection arrears on absorption, deputation pay, or lien arrears. Salary for more than 12 months received in one financial year. Voluntary retirement or termination compensation (if exemption under Section 10(10C) is not claimed). Arrears of family pension received by a dependent.

If you received DA arrears recently, use our free DA and arrears tools to calculate the arrear amount first, then come back here to compute the tax relief.

How Section 89(1) Relief Is Calculated – The Formula

The relief computation follows Rule 21A of the Income Tax Rules, 1962. Here is the step-by-step process that our calculator performs automatically.

Step 1 – Tax on Total Income WITH Arrears (Year of Receipt)

Calculate the income tax on your total taxable income in the year you received the arrears, including the arrears amount. Call this amount Tax A.

Step 2 – Tax on Total Income WITHOUT Arrears (Year of Receipt)

Calculate the income tax on your total taxable income in the year of receipt, but this time exclude the arrears amount. Call this amount Tax B.

Step 3 – Difference in Receipt Year

Calculate the extra tax caused by the arrears in the receipt year: Amount A = Tax A minus Tax B. This is the additional tax you paid because the arrears landed in the current year.

Step 4 – Tax in the Original Year WITH Arrears Spread Back

Go back to the financial year(s) the arrears actually relate to. Add the arrears to the total income of that original year. Calculate the tax at that year’s applicable slab rates (not the current year’s rates). Call this Tax C.

Step 5 – Tax in the Original Year WITHOUT Arrears

Calculate the tax on the original year’s total income without the arrears. Call this Tax D.

Step 6 – Difference in Original Year

Amount B = Tax C minus Tax D. This is the tax the arrears would have generated if they had been taxed in the year they related to.

Step 7 – Compute the Relief

Relief under Section 89(1) = Amount A minus Amount B.

If Amount A exceeds Amount B, you get relief equal to the difference. If Amount B equals or exceeds Amount A, the relief is zero — you are not worse off from the timing.

When arrears relate to multiple prior years, Steps 4-6 are performed separately for each year using that year’s income and slab rates, and the differences are summed.

How to Use the SalaryBox Form 10E Calculator

Our calculator automates the entire Rule 21A computation and generates the figures you need for filing Form 10E.

Step 1 – Enter Receipt Year Details

Input the financial year in which you received the arrears, your total taxable income in that year (including arrears), and the total arrears amount received. Select your tax regime (old or new) for the receipt year.

Step 2 – Allocate Arrears to Prior Years

Break down the total arrears by the financial year(s) they relate to. For example, if you received Rs 2,40,000 in DA arrears in FY 2025-26 covering January 2024 to March 2025, allocate Rs 1,80,000 to FY 2024-25 and Rs 60,000 to FY 2023-24 (or however the arrears split). Enter the total taxable income of each prior year (excluding the arrears) as per your ITR filed for that year.

Step 3 – View Relief and Form 10E Figures

The calculator produces the complete Annexure-I figures (total income with and without arrears, tax on each, and the difference for the receipt year) and the Table A figures (year-wise allocation of arrears, tax in each original year with and without arrears, and the difference). It then computes the final relief amount, which is what you enter on Form 10E and claim in your ITR.

The calculator automatically applies the correct slab rates, Section 87A rebate amount, surcharge thresholds, and health and education cess rate for each financial year — under both old and new regimes. You do not need to look up historical slab tables.

Annexure-I and Table A – What They Mean

Form 10E requires you to fill Annexure-I and Table A. Our calculator generates both sets of figures.

Annexure-I – Receipt Year Computation

This section captures the tax impact of arrears in the year you received them. It includes: total income including arrears, tax on total income including arrears, total income excluding arrears, tax on total income excluding arrears, and the difference (Amount A). This tells the income tax department how much extra tax the arrears caused in the receipt year.

Table A – Year-Wise Arrears Allocation

This section breaks down the arrears by the original financial year(s) they relate to. For each year, it shows: the arrears amount allocated to that year, total income of that year (as per the ITR filed), tax on that income, revised income (original income plus arrears), tax on the revised income, and the difference. The sum of all year-wise differences gives Amount B. The relief is Amount A minus Amount B.

Getting these figures right is critical — errors in allocation or income figures are the most common cause of Form 10E rejection.

Worked Example – DA Arrears Relief Calculation

Let us work through a real-world example to show how the relief is computed.

Scenario

Rajesh is a central government employee (Level 11, 7th CPC) who receives Rs 3,00,000 in DA arrears in FY 2025-26. The arrears cover: Rs 1,80,000 relating to FY 2024-25, and Rs 1,20,000 relating to FY 2023-24. He uses the new tax regime.

His total taxable income in FY 2025-26 (including arrears) is Rs 15,00,000. His total taxable income in FY 2024-25 (as per filed ITR, without these arrears) was Rs 11,50,000. His total taxable income in FY 2023-24 (as per filed ITR, without these arrears) was Rs 10,80,000.

Step 1-3: Receipt Year (FY 2025-26, New Regime)

Tax on Rs 15,00,000 (with arrears) = Rs 1,45,600 (after rebate and cess).
Tax on Rs 12,00,000 (without arrears) = Rs 0 (within the Rs 12 lakh rebate threshold under new regime).
Amount A = Rs 1,45,600 minus Rs 0 = Rs 1,45,600.

Step 4-6: FY 2024-25 (New Regime)

Tax on Rs 11,50,000 (without arrears) = Rs 0 (within rebate threshold).
Tax on Rs 13,30,000 (with Rs 1,80,000 arrears added) = Rs 76,440.
Difference for FY 2024-25 = Rs 76,440.

Step 4-6: FY 2023-24 (New Regime)

Tax on Rs 10,80,000 (without arrears) = Rs 0 (within the rebate threshold for FY 2023-24).
Tax on Rs 12,00,000 (with Rs 1,20,000 arrears added) = Rs 0 (still within rebate for FY 2023-24 under new regime where rebate applied up to Rs 7 lakh taxable income — note: actual rates differ by year; the calculator applies the exact FY-specific rules).
Difference for FY 2023-24 = calculated at that year’s specific slab rates and rebate.

Final Relief

Amount B = Sum of year-wise differences.
Relief = Amount A minus Amount B.

If the total Amount B is Rs 94,800, then the relief is Rs 1,45,600 minus Rs 94,800 = Rs 50,800. Rajesh can claim Rs 50,800 as relief under Section 89(1) by filing Form 10E before his ITR.

This example illustrates why the calculator is essential — the math involves looking up each year’s unique slab rates, rebate limits, and cess rates, which is error-prone when done manually.

How to File Form 10E on the Income Tax Portal

Filing Form 10E is mandatory to claim Section 89(1) relief. Here are the exact steps.

Step 1 – Log in to the Income Tax E-Filing Portal

Go to incometax.gov.in and log in with your PAN and password.

Step 2 – Navigate to Form 10E

Click on e-File, then Income Tax Forms, then File Income Tax Forms. Search for Form 10E or find it under “Persons not having business/professional income.”

Step 3 – Select the Assessment Year

Choose the correct Assessment Year. For arrears received in FY 2025-26, select AY 2026-27. For arrears received in FY 2026-27, select AY 2027-28.

Step 4 – Fill Annexure-I

Enter your total income including arrears, tax thereon, total income excluding arrears, and tax thereon. The portal auto-computes the difference. Use the figures from our calculator.

Step 5 – Fill Table A

For each prior year the arrears relate to, enter the arrears amount allocated, the original total income (from your filed ITR), tax on original income, revised total income (original plus arrears), and tax on revised income. The portal computes the year-wise differences and the total relief.

Step 6 – Verify and Submit

Verify that the auto-computed relief matches your calculator output. Submit the form and save the acknowledgement receipt. You will need the acknowledgement number if any rectification is needed later.

Step 7 – File Your ITR

Now file your Income Tax Return for the same assessment year. Enter the Section 89(1) relief amount in the appropriate schedule (typically under “Tax Relief” or “Relief u/s 89”). The portal validates this against your filed Form 10E.

For guidance on how TDS is handled on salary arrears, read our comprehensive guide to TDS on salaries and our beginner’s guide to TDS.

Section 89(1) vs Section 157 – What Changed Under the New IT Act?

The Income Tax Act, 2025 came into effect from 1 April 2026 (tax year 2026-27), replacing the Income Tax Act, 1961. The relief provision has been renumbered from Section 89(1) to Section 157.

What Is the Same

The substance of the provision is identical. Section 157 of the 2025 Act mirrors Section 89(1) of the 1961 Act. The four categories of receipts that trigger relief are the same: arrears or advance salary, salary for more than 12 months in one year, profits in lieu of salary, and arrears of family pension. The relief computation method (Rule 21A) has not changed. Form 10E continues to be the prescribed form.

What Changed

The section number changed from 89(1) to 157. Cross-references within the provision now point to the 2025 Act’s section numbers (for example, “profits in lieu of salary” now references Section 18(1) instead of Section 17(3)). The anti-abuse provision (previously a proviso in Section 89 barring relief if Section 10(10C) exemption on VRS was claimed) now references Section 19(1)(Table: Sl. No. 12) for the same purpose.

Which Section to Use When

For ITR filing for FY 2025-26 (AY 2026-27) and earlier years: Section 89(1) of the 1961 Act applies. For ITR filing for FY 2026-27 (AY 2027-28) onwards: Section 157 of the 2025 Act applies. Our calculator handles both automatically based on the assessment year you select.

Common Mistakes That Get Your Relief Denied

These are the errors that result in relief being disallowed, flagged during processing, or triggering a demand notice under Section 143(1).

Mistake 1 – Filing ITR Before Form 10E

This is the single most common and costliest mistake. If you claim Section 89(1) relief in your ITR without a corresponding Form 10E already filed on the portal, the relief is disallowed during CPC processing and a tax demand is raised against you. Always file Form 10E first, then file your ITR.

Mistake 2 – Using Current Year Slab Rates for Prior Years

The relief computation requires using the actual slab rates applicable in each prior year — not the current year’s rates. FY 2018-19 had different slabs and rebate limits than FY 2024-25. Using wrong rates produces a wrong relief figure, which the CPC’s automated system flags. Our calculator eliminates this error by storing the correct rates for every year from FY 2015-16 onward.

Mistake 3 – Not Allocating Arrears to the Correct Years

If DA arrears cover multiple financial years, each year’s portion must be allocated separately in Table A. Lumping all arrears into one year produces incorrect relief figures. Match the allocation to the months covered by the arrears as shown in your arrear statement or pay slip.

Mistake 4 – Incorrect Prior Year Income Figures

The total income for each prior year must match what you reported in your ITR for that year. If you enter estimated or incorrect figures, the relief computation will be wrong, and any mismatch with the department’s records can trigger scrutiny. Keep copies of your prior year ITRs or Form 16s handy.

Mistake 5 – Forgetting the Cess

Tax computation for Section 89(1) must include the applicable cess. From FY 2018-19 onwards, the health and education cess is 4%. Prior years had different cess rates (3% education cess up to FY 2017-18). Missing the cess produces a wrong relief amount.

Avoid these and other common tax errors by reading our guide on Indian payroll tax structure.

Is Section 89(1) Relief Available Under the New Tax Regime?

Yes, Section 89(1) relief is fully available under the new tax regime. Section 115BAC (which governs the new regime) restricts only the listed deductions and exemptions, and Section 89(1) is not among them.

Whether you file under the old regime or the new regime, you can file Form 10E and claim the full relief. The calculator applies the correct regime-specific slabs for both the receipt year and the prior year(s).

If you are unsure which tax regime saves you more, use our old vs new tax regime calculator (available on the free tools page) to compare before filing.

Can Relief Be Zero Even with Large Arrears?

Yes. Relief under Section 89(1) can be zero (or negligible) in several situations.

If your income in both the receipt year and the original year(s) falls within the same tax slab, the timing of the arrears does not push you into a higher bracket, and the extra tax in the receipt year equals the tax that would have been charged in the original year. No rate difference means no relief.

If your income in the original year was already in the highest slab (30%), adding arrears back to that year does not change the rate. The tax is the same whether it is charged now or then.

If you are under the new regime and both years’ incomes (with and without arrears) are below the Rs 12 lakh rebate threshold, the tax in both scenarios is zero, and there is no relief to claim.

The calculator clearly shows when relief is zero so you know there is no need to file Form 10E in that situation.

Which Financial Years’ Slab Rates Does the Calculator Support?

Our calculator supports slab rate computation for every financial year from FY 2015-16 (AY 2016-17) onwards, under both old and new tax regimes. This covers:

FY 2015-16 through FY 2019-20: Old regime only (new regime did not exist).
FY 2020-21 onwards: Both old and new regime slabs.
FY 2024-25: Updated new regime slabs (rebate up to Rs 7 lakh, standard deduction Rs 75,000).
FY 2025-26: Updated new regime slabs (rebate up to Rs 12 lakh, income up to Rs 12.75 lakh effectively tax-free for salaried employees).
FY 2026-27: Same slabs as FY 2025-26 (no changes in Union Budget 2026), now under the Income Tax Act, 2025.

Each year’s correct Section 87A rebate limit, cess rate, and surcharge thresholds are built into the calculator. You do not need to look up any of these.

Role of the Employer – Section 192(2A)

Under Section 192(2A), your employer can compute and allow Section 89(1) relief while deducting TDS from your salary. This means the relief can be factored in at the TDS stage itself, reducing your monthly tax deduction when arrears are paid.

In practice, many employers (especially government departments disbursing 7th CPC or DA arrears to large numbers of employees) compute the relief and adjust TDS accordingly. However, Form 10E still needs to be filed by the employee individually on the income tax portal before the ITR is filed.

If your employer has already factored the relief into TDS (check your Form 16, Part B, which should mention relief under Section 89), ensure the amount matches your own calculation before filing Form 10E. Use our TDS calculator to cross-verify.

Form 10E Filing Deadlines

There is no separate deadline for filing Form 10E. However, it must be filed before you file your ITR for the relevant assessment year.

For arrears received in FY 2025-26 (AY 2026-27): File Form 10E before your ITR due date of 31 July 2026 (for individuals without audit requirement). For arrears received in FY 2026-27 (AY 2027-28): File Form 10E before 31 July 2027.

The ideal practice is to file Form 10E as soon as you have the arrears figure and your Form 16 — typically in June or July. Do not wait until the last day. If you are filing a belated or revised return, Form 10E can still be filed before that return, but not after.

For comprehensive tax compliance, read our guide to tax compliance in India.

Types of Arrears Covered Under Section 89(1)

Here is a complete list of income types for which you can claim relief.

Salary Arrears (Annexure-I / Table A)

DA arrears (the most common for central and state government employees). 7th CPC pay revision arrears. MACP (Modified Assured Career Progression) arrears. ACP arrears. Pay fixation arrears on promotion. Court-ordered salary restoration. Arrears from pay protection on absorption. Deputation pay arrears. Lien arrears.

Family Pension Arrears (Annexure-I / Table A)

Arrears of family pension received by a spouse or dependent, where the pension was revised retrospectively.

Profits in Lieu of Salary (Annexure-II)

Compensation on termination or voluntary retirement (if Section 10(10C) exemption is not claimed). Compensation under a modified VRS scheme.

For employees managing exit settlements that include arrears, our FnF calculator and leave encashment calculator can help estimate the complete exit payout.

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Explore all tools on our free tools page.

Frequently Asked Questions (FAQ)

What is Section 89(1) relief and when can I claim it?

Section 89(1) provides tax relief when you receive salary arrears or advance salary, and the bulk receipt pushes your total income into a higher tax slab than it would have been if the income was taxed in the year it related to. The relief equals the extra tax in the receipt year minus the tax the arrears would have attracted in the original year(s). It is available for DA arrears, pay revision arrears, MACP dues, court-ordered salary, and arrears of family pension. You must file Form 10E before your ITR to claim it.

Is Form 10E mandatory to claim Section 89(1) relief?

Yes, Form 10E filing is mandatory since AY 2015-16. If you claim Section 89(1) relief in your Income Tax Return without a corresponding Form 10E already filed on the income tax portal, the relief will be disallowed during CPC processing and a tax demand will be raised against you. Always file Form 10E first, then your ITR.

Has Section 89(1) been replaced by a new section?

Yes, from tax year 2026-27 (FY 2026-27 / AY 2027-28), the relief provision is found in Section 157 of the Income Tax Act, 2025, which replaced the Income Tax Act, 1961. The substance is identical — Section 157 mirrors Section 89(1) in structure and effect. For filings relating to FY 2025-26 and earlier, Section 89(1) of the 1961 Act continues to apply.

Is Section 89(1) relief available under the new tax regime?

Yes, Section 89(1) relief is available under both old and new tax regimes. The new regime (Section 115BAC) restricts certain deductions and exemptions, but Section 89(1) relief is not among the restricted items. You can file Form 10E and claim the full relief regardless of which regime you choose.

How do I calculate Section 89(1) relief?

Calculate tax on your total income including arrears in the receipt year (Tax A). Calculate tax without arrears in the same year (Tax B). The difference is Amount A. Then, for each prior year the arrears relate to, calculate tax with and without arrears at that year’s slab rates. The difference is Amount B. Relief = Amount A minus Amount B, floored at zero. Our calculator performs all six steps automatically with correct year-specific rates.

Can relief be zero even if I received large arrears?

Yes. Relief is zero when the arrears do not cause you to be taxed at a higher rate. This happens when both your receipt year income and the original year income fall in the same slab bracket, or when both are below the rebate threshold. In such cases, the timing of the arrears does not create any additional tax burden, so there is no relief to claim.

What happens if I file Form 10E after filing my ITR?

If you file your ITR first without a corresponding Form 10E, the Section 89(1) relief claimed in the ITR will be disallowed during CPC processing, and a demand notice under Section 143(1) will be raised for the disallowed amount plus interest. You would then need to file Form 10E, file a revised or rectified return, and request reprocessing — a time-consuming process that can be avoided by filing Form 10E first.

What if arrears relate to multiple financial years?

If your arrears cover more than one prior financial year, you must allocate the arrears amount separately to each year in Table A of Form 10E. The relief computation (Steps 4-6) is performed independently for each prior year using that year’s actual slab rates and your actual income for that year. The sum of all year-wise differences gives Amount B, and the final relief is Amount A minus the total Amount B.

Where do I get my prior year income figures for Form 10E?

You need the total taxable income for each prior year as reported in your filed ITR. You can find this in your Form 16 (Part B) issued by your employer, your filed ITR acknowledgement or ITR-V downloaded from the income tax portal, or your Annual Information Statement (AIS) on the portal. If these are unavailable, salary slips from the relevant months can be used to reconstruct the income.

Does my employer compute Section 89(1) relief automatically?

Under Section 192(2A), your employer can compute Section 89(1) relief while deducting TDS. Many government departments do this when disbursing 7th CPC or DA arrears. If your employer has applied the relief, it will be reflected in Form 16 Part B. However, you must still file Form 10E individually on the income tax portal before filing your ITR. The employer’s TDS adjustment does not substitute for Form 10E.

Conclusion

If you received salary arrears in any form — DA arrears, 7th CPC pay revision, MACP fixation, or court-ordered dues — Section 89(1) relief (Section 157 from FY 2026-27) can save you thousands of rupees in unnecessary tax. But the relief is not automatic. You must compute it correctly, file Form 10E before your ITR, and enter the matching relief figure in your return.

The SalaryBox Form 10E Calculator does the hard work for you. It applies the correct year-specific slab rates, rebate amounts, and cess rates from FY 2015-16 onward under both tax regimes, generates Annexure-I and Table A figures ready to enter on the income tax portal, and clearly shows whether relief is available and how much you can claim.

Pair this calculator with our TDS calculator, salary calculator, and tax saving calculator to take full control of your tax planning.

Try the Form 10E calculator now — it is free, instant, and could save you a demand notice.