Previous year's income received in this year

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giri_mih (Querist)
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13 July 2015 Hi, I am working in pvt ltd company. I had received few days Mar-14 salary(arrears) in Apr-14, Since this income was received in Apr-14 so not included in form 16 and also at time of filing return for AY 14-15. Now my employer has added arrears in current year's earning(FY-14-15) in form 16. Since my current years tax slab is high so higher TDS is deducted for arrears, now I want to re-claim additional paid tax as part of TDS in current year. Could you please help me in below queries:
1. Shall I fill form 10E and get signed from my employer -> calculate difference of paid tax due to higher tax slab in current year -->put that tax amount in ITR under u/s 89 ?
2 Is this form 10 should be uploaded anywhere or sent along with ITR-V?

Regards
Giri
slab is

CMA Gul S

CMA Gul S (Expert)
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13 July 2015 Hi Giri -

First of all for all income that you earn is taxed. your query of arrears received in this year and filing of 10E may not help
The employer would have filed his Form 24 and cannot modify the same now.

If not, you can update the same on ITR with all needed details

giri_mih

giri_mih (Querist)
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13 July 2015 Thanks for quick reply.
My employer has included Income(FY14-15)+arrears(FY 13-14) as earning of FY 14-15 and already deducted TDS. They have not informed me anything else. So as per your details mentioned in your comments I should not ask 10E because I can not reclaim..Am I correct?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 August 2024 Yes, you are correct in understanding that Form 10E is used to claim relief under Section 89(1) of the Income Tax Act for income received in arrears. Here’s a detailed guide on how to handle the situation:

### **1. Claiming Relief Under Section 89(1)**

**Form 10E:**

- **Purpose:** Form 10E is used to claim relief for arrears or advance salary under Section 89(1). It helps in calculating the tax relief when you receive income in arrears which affects your tax liability in the year of receipt.
- **Procedure:**
1. **Fill Form 10E:** You need to fill out Form 10E to compute the relief available under Section 89(1). This form helps in calculating the difference in tax liability due to receiving arrears in the current year.
2. **Calculation:** Calculate the tax payable on the total income including arrears in the current year. Then, calculate what the tax would have been if the arrears had been received in the previous year. The difference between these two amounts is the relief you can claim.

**Steps:**

1. **Complete Form 10E:** Provide details of the income received in arrears and the tax calculations for both years (current and previous years).
2. **Attach Form 10E:** While filing your Income Tax Return (ITR), you should mention that you are claiming relief under Section 89(1). You do not need to submit Form 10E separately to the tax department, but you should keep it as a record.

**ITR Filing:**

- **Claim Relief:** In your ITR, you will need to include the relief amount calculated using Form 10E. This relief should be entered in the appropriate section of the ITR under "Tax Details" or "Section 89(1)".
- **Form 10E Submission:** While you don’t need to upload Form 10E separately with your ITR, you should retain a copy in case the Income Tax Department asks for it.

### **2. Handling TDS and Additional Tax Paid**

- **TDS Adjustment:** If TDS has been deducted at a higher rate due to the inclusion of arrears, you can adjust this extra TDS against your tax liability by claiming relief under Section 89(1) as explained.
- **Tax Calculation:** Ensure that the relief claimed under Section 89(1) is accurately reflected in your tax computation. The excess tax paid (due to higher TDS) should be adjusted against your final tax liability in the current year.

### **3. Summary**

- **Filling Form 10E:** Yes, you should fill Form 10E to calculate the relief and claim it in your ITR.
- **Submission:** Form 10E itself is not submitted separately with ITR but should be kept for your records. You report the relief amount calculated in your ITR.
- **Reclaiming TDS:** The additional tax paid due to higher TDS can be reclaimed by adjusting the tax computation based on the relief calculated.

### **Steps to Take:**

1. **Calculate Relief:** Complete Form 10E and determine the relief under Section 89(1).
2. **File ITR:** Enter the relief amount in your ITR.
3. **Retain Documentation:** Keep Form 10E and related calculations as supporting documents.

For detailed and accurate assistance, especially if you have a complex tax situation, consulting a Chartered Accountant (CA) is advisable. They can ensure that all calculations are correct and that you maximize your tax benefits.