Income tax form 10E: Who is it for and how to file?

Form 10E is a tax form used in India used to claim relief under Section 89(1) of the Income Tax Act, 1961. This form is used to claim relief for arrears of salary, wages, and other similar income when the tax on such income has been paid in the current year, but the income was earned earlier.

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For example, if an individual receives salary arrears in the current year for work done in a previous year, and tax has been paid on this income in the current year, the individual can use Form 10E to claim relief for the excess tax paid. It can be done by claiming a credit for the excess tax paid against the tax liability for the earlier year or by claiming a refund for the excess tax paid.

See also: How to file income tax returns online for salaried employees?

Form 10E: What is it?

Form 10E is a tax form used in India to seek relief on salary arrears. It is used by individuals who have received a salary in arrears or in advance, which includes the current year’s income. The form is used to claim relief under Section 89(1) of the Income Tax Act, 1961 (ITA).

To use Form 10E, the individual must first calculate the tax on their current year’s salary. The individual can then claim relief on the excess tax paid by filling out Form 10E and submitting it to the income tax department. The form requires information such as the individual’s details, the salary received in arrears or in advance, the calculations of the excess tax paid, and the relief claimed.

Form 10E can be used to claim relief on the salary received in arrears or advance for previous years as well, as long as the individual has not claimed relief for the same amount in any previous year.

Types of arrears covered by form 10 E

Here is a list of the types of arrears that are taxable in the same year as they are received:

Salary Arrears
Family pension arrears
Advance salary
Commuted pension
Gratuity
Compensation received from an employer for termination of employment

However, you can reduce the additional tax liability caused by any delays in receiving such income under Section 89(1).

Form 10E: Importance

Form 10E is used to claim relief for any excess tax paid or deducted at source during the year. There are many reasons why it is essential to file Form 10E:

To claim a refund: If you have paid more tax than required, you can claim a refund by filing Form 10E.
To avoid interest and penalty: If you have paid excess tax and do not claim a refund, you may be charged interest on the excess amount. Filing Form 10E can help you avoid this interest.
To claim tax relief: If you have received any salary arrears or bonus during the year, you may be eligible to claim tax relief on these amounts by filing Form 10E.
To correct errors: If any errors occur in the tax deducted at source (TDS) from your salary, you can use Form 10E to request correction of the errors.

Overall, it is essential to file Form 10E to ensure that you are paying the correct amount of tax and to claim any refunds or tax relief that you may be entitled to. It is essential to consult with a tax professional or refer to the relevant tax laws in India to determine if you are eligible to use Form 10E and how to complete the form properly.

How to file form 10E online?

Form 10E can be filed online through the Income Tax Department‘s e-filing portal or it can be filed on paper by visiting a tax office or mailing it to the Income Tax Department.
To file it online, you must sign in to your tax e-filing account.
Go to the Income tax forms after selecting the e-file option.
Select Form 10E for relief under the section 89 option.
Select the assessment year when determining the best time to submit Form 10E.
After selecting the submission mode, you must click the continue button.
Enter the necessary details, then select “Save Draft.”
Before filling out the necessary information, you must choose annexure-I for the salary arrears.
To verify the details and submit the form, choose the preview and submit option.

Form 10E: Things to keep in mind

Here are a few tips to remember about Form 10E:

Form 10E claims relief for salary, pension, or family pension arrears.
To claim relief, the individual must have received the arrears in the current financial year and must have paid tax on the same in an earlier financial year.
Form 10E must be filed along with the individual’s income tax return.
The form should be filled out carefully and accurately as it calculates the amount of tax relief the individual is eligible to receive.
Form 10E can be filed electronically or by paper.
Keeping copies of Form 10E and any supporting documents for future reference is crucial.

Common mistakes to avoid while filing Form 10E

Missing or incorrect details
Incorrect arrears breakup
Not attaching necessary supporting documents
Inconsistent information with other tax forms
Incorrect calculation of relief
Late submission
Ignoring guidelines

Tips to file Form 10E accurately and on time

Know the eligibility criteria
Gather all relevant information
Verify the calculations
Fill in the form accurately
Cross-verify with other tax forms
Attach supporting documents
Stay updated with deadlines
Keep a copy of the filed form
Seek professional assistance
Consequences of incorrect or delayed filing of Form 10E

What happens if you don’t file Form 10 E?

Beginning with the income tax returns for the Financial Year 2014-15 (Assessment Year 2015-16), it is now mandatory to file Form 10 E if you wish to avail relief under Section 89(1). Taxpayers who have claimed relief under Section 89(1) but have not submitted Form 10E have received an income tax notice from the Tax Department informing them about this requirement. The notice states, “The relief u/s 89 has not been allowed in your case, as the online form 10E has not been filed by you. The furnishing of Online form 10E is required as per sec.89 of the Income Tax Act.”

FAQs

What is Form 10E and when do I need to use it?

Form 10E is a tax form used to claim relief under section 89(1) of the ITA, 1961, in India. You need to file Form 10E if you have received arrears of salary or bonus that were earned in previous years but were paid in the current year and you want to claim relief under Section 89 of the ITA, 1961.

Who is eligible to use Form 10E?

Form 10E can be used by individuals who have received arrears of salary or bonuses earned in previous years but paid in the current year.

How do I calculate the relief available under Form 10E?

To calculate the relief available under Form 10E, you must follow the steps outlined. Calculate the amount of arrears you have received, the tax deducted from them, and the tax that would have been payable if the arrears were received in the year they were earned. You can then use this information to calculate the relief available to you under Form 10E.

How do I claim the relief available under Form 10E?

To claim the relief available under Form 10E, you must fill out the form and submit it along with your income tax return. You can claim the relief by filling in the relevant details in your income tax return's 'Relief under Section 89' section.

Is it mandatory to use Form 10E?

It is not mandatory to use Form 10E. However, if you want to claim relief under Section 89 of the ITA, 1961, on account of payment of arrears of salary, bonus, etc., you need to use the form.

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