What is Form 10E and do I need it?

It is the form that supports a Section 89(1) relief claim. File it on the income tax portal before you file your return. If you claim the relief without filing Form 10E, the claim is disallowed and you get a notice.

Are arrears taxed in the year they were earned or the year I received them?

The year you received them, by default. Section 89(1) relief is the mechanism that lets you recompute as though you had been paid on time, and pay the lower of the two amounts.

Salary arrears calculator

Arrears happen when a raise is approved in, say, September but takes effect from April. Six months of the difference is owed to you in one payment.

The catch is tax. The whole amount lands in one month, so it is taxed in the year you receive it, at the rate that applies once it has been piled on top of your current salary.

Arrears in hand

₹71,280

₹90,000 owed, less roughly ₹18,720 of tax and cess

Monthly difference: ₹15,000
Months owed: 6
Gross arrears: ₹90,000
Tax at your top slab: - ₹18,000
Cess at 4%: - ₹720
Net arrears: ₹71,280

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How this is worked out

Arrears are the monthly difference multiplied by the number of months being back-paid.
Because arrears sit on top of your existing salary, they are taxed at your highest slab rate rather than an average rate.
Cess of 4% is added to the tax.

What this does not cover

Section 89(1) relief exists precisely for this. It lets you spread arrears back across the years they relate to and pay tax as if you had received them on time. Claiming it needs Form 10E filed before your return.
PF is usually deducted on arrears too, which this calculator does not show.
A very large arrears payment can push you into a higher slab for the year, making the relief worth more than it first appears.

Questions people ask

What is Form 10E and do I need it?: It is the form that supports a Section 89(1) relief claim. File it on the income tax portal before you file your return. If you claim the relief without filing Form 10E, the claim is disallowed and you get a notice.
Are arrears taxed in the year they were earned or the year I received them?: The year you received them, by default. Section 89(1) relief is the mechanism that lets you recompute as though you had been paid on time, and pay the lower of the two amounts.

Where these figures come from

Rates and rules on this page were last checked against the source on 31 August 2026. Tax law changes; check the source before you rely on a number for a decision.

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