What is Form 10E?

Form 10E is an online form submitted to the Income Tax Department to claim relief under Section 89 for income received in advance or arrears during a financial year. This relief helps prevent individuals from being taxed at a higher rate due to the bunching of income in one year.

Who Needs to File Form 10E?

• Individuals who have received:
  • Salary or family pension in arrears or advance (e.g., receiving 3 months’ salary in advance)
  • Gratuity exceeding ₹3 lakhs
  • Compensation on termination of employment exceeding ₹15 lakhs
  • Leave encashment exceeding ₹3 lakhs
  • Commutation of pension

Benefits of Filing Form 10E:

1. Reduced Tax Liability: By claiming relief under Section 89, you can lower your overall tax burden for the year.
2. Accurate Tax Calculation: Ensures your income is assessed correctly, preventing overpayment of taxes.
3. Compliance with Tax Laws: Demonstrates adherence to tax regulations, maintaining a good standing with the department.

Key Points to Remember:

1. Filing Deadline: Form 10E must be filed before submitting your Income Tax Return (ITR) for the relevant assessment year.
2. Mandatory for Claiming Relief: Filing Form 10E is mandatory if you want to claim relief under Section 89.
3. Online Submission: The form can be filed electronically through the Income Tax Department’s e-filing portal.
4. Detailed Instructions: Guidance and instructions are available on the department’s website to assist with filling the form.