How do I file Form 10E for Tax Exemption?
How to Fill Out Form 10E – Steps to
Fill Out Form 10E for Relief of Tax Exemption – As a salaried
individual, if you receive any payment in advance or in arrears, you may be required
to pay tax on the full amount received. Protects you from any excess tax
liability due to any delay in receiving income under Section 89(1). In other
words, if you receive any part of your salary in arrears, you can claim tax
savings under Section 89(1) thereon by filing Form 10E.
Under Section 89(1), you can obtain
tax benefits by recalculating tax for both years (to which arrears are received
and arrears refer). The tax liability is adjusted after assuming that arrears
were received in the same year they were due.
What is the Section 89(1) tax
exemption?
As a taxpayer, the following types
of delays received are taxable in the same year they are received –
Salaries in arrears
Salary in advance
Family pension in arrears
Switched pension
What is Form 10E?
You are required to complete Form
10E if you wish to claim tax benefits under Section 89(1) of the Income Tax Act
of 1961. Under Section 89(1) of the Act, you are eligible to claim tax benefits
for back pay received in the form of delay. Any delays received are reflected
in Part B of your Form 16.
Form 10E is required to provide
information on income received under Section 192(2A) and may be filed by a
government official or any employee working in a business, cooperative society,
university, local authority, institution or association or organ.
How do I file Form 10E?
The following steps explain the
process of completing Form 10E –
Log in to your Income Tax Return
Account
Go to e-File and then to Income Tax
Forms
Select 'FORM NO. 10E - Form for
relief u/s 89 'in 'Form name'.
Select the Appraisal Year (or AY)
for which you need to file Form 10E (e.g. select Appraisal Year as 2019-20 if
the salary arrears you received are for the 2018-19 Financial Year (or of
Evaluation 2019-20)
Select the shipping mode and click
'Continue'.
Fill in the applicable details and
click the 'Save Draft' button
For salary arrears, select Annex-I*
and complete details as applicable
Click 'View and Submit' to review
the details and then submit the form
* Please note that the following
Attachments are available from the page menu –
Annex-I: For Delay or Advance
Salary
Appendix-IIA: free (previous
services for 15 years or more)
Appendix-III: Compensation for
termination of an employment contract
Appendix-IV: For retirement
Important Things to Consider When
Completing Form 10E
When completing Form 10E for
payroll arrears tax credits, consider the following:
You must complete Form 10E online
at the Department of Income Tax website.
If you claimed tax exemption in the
previous tax year but did not file a Form 10E, you will receive a non-compliance
notice from the Income Tax Department.
Before filing your income tax
return, you must complete Form 10E online.
Although wage arrears may be from
prior fiscal years, when you file Form 10E, you must select the assessment year
in which you received the arrears.
You do not need to attach any
copies of Form 10E filed with your income tax return (but keep a copy for
yourself)
Although your employer may ask for
confirmation after you submit Form 10E, it is not required that you submit this
form to your employer.
Tax credits under Section 89(1)
also apply to delayed family benefits.
There is no exemption under Section
89(1) for VRS (Voluntary Retirement Scheme) if you previously claimed exemption
under Section 10(10C)
The steps above will help you complete and submit Form 10E online to claim tax relief under section 89(1) of the Income Tax Act of 1961. Form 10E must be completed if you want to reduce your tax on arrears of wages received with delay. . If you have any concerns, concerns, or questions regarding Section 89(1), Form 10E, or your tax return, you should consult with a professional to ensure that you have completed your income tax correctly and without problems.
