File Form 10E to Save Taxes under Section 89

Last Updated at: December 19, 2019
492
How to fill form 10e

A form that helps you save taxes on arrears under Section 89 of the Income Tax Act, 1961 is called form 10E.

At times, the individuals receive their salaries in arrears in the next financial year, making them stressed about the hefty amounts they might have to pay in the form of taxes. To reduce this burden, the government has introduced a tax allowance under Section 89, and this relief from the taxes can be obtained easily by filing in Form 10E. You can claim tax relief under Section 89 in the following cases:

  • Arrears or Advance
  • Premature withdrawal
  • Family Pension
  • Gratuity
  • Pension value
  • Compensation on employment termination

Section 89(1) and the relief offered:

Under the Income Tax Act, Section 89(1) assists the tax liabilities that have to be paid by an individual on the income of the previous year. The individual must be accountable for paying the taxes on the former income to avail of the benefits under Section 89(1). In this case, the tax rates depend on the year of salary paid to the individuals.

If the individual wants to claim the relief under Section 89(1), it is compulsory to file in Form 10E according to the Income Tax Department. If Form 10E is not submitted, then the claim will be rejected. Further, the taxpayers will be sent a notice by the Income Tax.

Get free legal advice now

Filing Form 10E

Filing the form is quite a simple process. Follow the given steps to file form 10E. These are:

Step 1:

Open the official portal of the Income Tax Department.

Step 2:

Log in to the portal using your credentials. These include User ID, Password, and Date of Birth.

Step 3:

From the top menu, click on the e-file option. In the tabs, select the “Prepare and submit Online form (other than ITR).”

Step 4:

A new page opens. Here, in the forms drop-down option, you need to select “Form 10E”. Along with this, you also have to enter the assessment year accordingly. Once done, click on “continue.”

Step 5:

A new page opens where you can find the instructions to file Form 10E.

Step 6:

Read all the instructions carefully and fill in the relevant details accordingly.

Step 7:

After filling in all the details, confirm and “Submit” the form.

In case the information and filing of the form could not be completed in one go, save it in the way of a draft to save the efforts of filing the arrangement all over again.

Points to remember while filling the form:

  • File this form before filing the income tax return.
  • Choose the correct financial and assessment years.
  • To avail the benefits of tax relief, submit Form 10E as proof.
  • Various details regarding the arrears and income have to be submitted while filing the form.

Calculating the Relief Amount:

To calculate the relief amount, follow the given procedure:

Step 1:

Calculate the tax on the total salary, including both previous and presently (additional) received ones.

Step 2:

Leaving the additional salary (Arrears), calculate the total tax on the income.

Step 3:

Calculate and check the amount difference in steps 1 and 2.

Step 4:

Exclude the arrears and calculate the total tax to be paid on the income.

Step 5:

Include the arrears and calculate the total tax to be paid on the income.

Step 6:

Calculate and check the amount difference in steps 4 and 5.

Step 7:

In case the amount obtained in Step 3 is more than the amount in Step 6, then relief can be allowed. If the amount in Step 6 is more, then no relief can be granted.

Using these steps, one can calculate whether they are liable to obtain relief or not.

Conclusion:

Section 89(1) and filing of Form 10E are efficient methods to save oneself from spending hefty amounts on taxes for their income. Without this form, the individuals are not allowed to avail of the benefits.

Frequently Asked Questions (FAQs)

  1. When was Form 10E introduced? 

Form 10E was made mandatory by the income tax department from the financial year 2014-15.

  1. How can form 10E be filed?

To file form 10E, visit the portal of the Income Tax Department, where you can find both the procedure and the form.

  1. How should the assessment year be selected?

Select the assessment year according to the year of payment of arrears made.

  1. When does the Form 10E have to be submitted?

Before filing the income tax returns, it is mandatory to fill this form to avail of the relief amount and its benefits.

  1. Does the copy of Form 10E need to be submitted?

No. Since this is an online form-filing process; no copy has to be submitted along with the form.

Have any more questions regarding Form 10E or other calculations of relief? Feel free to contact us and get your queries resolved quickly.

 

File Form 10E to Save Taxes under Section 89

492

A form that helps you save taxes on arrears under Section 89 of the Income Tax Act, 1961 is called form 10E.

At times, the individuals receive their salaries in arrears in the next financial year, making them stressed about the hefty amounts they might have to pay in the form of taxes. To reduce this burden, the government has introduced a tax allowance under Section 89, and this relief from the taxes can be obtained easily by filing in Form 10E. You can claim tax relief under Section 89 in the following cases:

  • Arrears or Advance
  • Premature withdrawal
  • Family Pension
  • Gratuity
  • Pension value
  • Compensation on employment termination

Section 89(1) and the relief offered:

Under the Income Tax Act, Section 89(1) assists the tax liabilities that have to be paid by an individual on the income of the previous year. The individual must be accountable for paying the taxes on the former income to avail of the benefits under Section 89(1). In this case, the tax rates depend on the year of salary paid to the individuals.

If the individual wants to claim the relief under Section 89(1), it is compulsory to file in Form 10E according to the Income Tax Department. If Form 10E is not submitted, then the claim will be rejected. Further, the taxpayers will be sent a notice by the Income Tax.

Get free legal advice now

Filing Form 10E

Filing the form is quite a simple process. Follow the given steps to file form 10E. These are:

Step 1:

Open the official portal of the Income Tax Department.

Step 2:

Log in to the portal using your credentials. These include User ID, Password, and Date of Birth.

Step 3:

From the top menu, click on the e-file option. In the tabs, select the “Prepare and submit Online form (other than ITR).”

Step 4:

A new page opens. Here, in the forms drop-down option, you need to select “Form 10E”. Along with this, you also have to enter the assessment year accordingly. Once done, click on “continue.”

Step 5:

A new page opens where you can find the instructions to file Form 10E.

Step 6:

Read all the instructions carefully and fill in the relevant details accordingly.

Step 7:

After filling in all the details, confirm and “Submit” the form.

In case the information and filing of the form could not be completed in one go, save it in the way of a draft to save the efforts of filing the arrangement all over again.

Points to remember while filling the form:

  • File this form before filing the income tax return.
  • Choose the correct financial and assessment years.
  • To avail the benefits of tax relief, submit Form 10E as proof.
  • Various details regarding the arrears and income have to be submitted while filing the form.

Calculating the Relief Amount:

To calculate the relief amount, follow the given procedure:

Step 1:

Calculate the tax on the total salary, including both previous and presently (additional) received ones.

Step 2:

Leaving the additional salary (Arrears), calculate the total tax on the income.

Step 3:

Calculate and check the amount difference in steps 1 and 2.

Step 4:

Exclude the arrears and calculate the total tax to be paid on the income.

Step 5:

Include the arrears and calculate the total tax to be paid on the income.

Step 6:

Calculate and check the amount difference in steps 4 and 5.

Step 7:

In case the amount obtained in Step 3 is more than the amount in Step 6, then relief can be allowed. If the amount in Step 6 is more, then no relief can be granted.

Using these steps, one can calculate whether they are liable to obtain relief or not.

Conclusion:

Section 89(1) and filing of Form 10E are efficient methods to save oneself from spending hefty amounts on taxes for their income. Without this form, the individuals are not allowed to avail of the benefits.

Frequently Asked Questions (FAQs)

  1. When was Form 10E introduced? 

Form 10E was made mandatory by the income tax department from the financial year 2014-15.

  1. How can form 10E be filed?

To file form 10E, visit the portal of the Income Tax Department, where you can find both the procedure and the form.

  1. How should the assessment year be selected?

Select the assessment year according to the year of payment of arrears made.

  1. When does the Form 10E have to be submitted?

Before filing the income tax returns, it is mandatory to fill this form to avail of the relief amount and its benefits.

  1. Does the copy of Form 10E need to be submitted?

No. Since this is an online form-filing process; no copy has to be submitted along with the form.

Have any more questions regarding Form 10E or other calculations of relief? Feel free to contact us and get your queries resolved quickly.

 

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