ITR
Arrears from the old employer received after leaving
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Facts
Salary arrears are taxed in the year received, unless already taxed on due basis. If arrears push you into a higher slab, relief under Sec 89 can be claimed by filing Form 10E before the ITR.
Provisions and law
- Sec 89, Income-tax Act 1961 (now Sec 157)Relief when arrears raise tax in the year of receipt, claimed through Form 10E.
Analysis
If ₹1,80,000 of arrears for FY 2023-24 were paid in FY 2025-26, include them in this year's salary. Compute relief by comparing tax with and without arrears in both years. File Form 10E online first, then claim the relief in ITR.
Conclusion
- Get the arrears break-up by year from the employer.
- Include arrears in salary for the year received.
- Compute Sec 89 relief.
- File Form 10E before the ITR.
- Claim relief in the return.
A Savvy can do this for you
Return after a job switch with two or more Form 16s
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