Filing Form 10E Is Mandatory to Claim Relief Under Section 89(1)
What Is Relief under Section 89(1)?
Tax is calculated on your total income received during the year. If your total income includes any past dues paid in the current year, you may be worried about paying a higher tax on such arrears (usually tax rates have gone up over the years).
To save you from any additional burden of tax due to delay in receiving income, the tax laws allow a relief under Section 89(1). If you have received any portion of your salary in arrears or in advance, or you have received a family pension in arrears, you are allowed some tax relief under Section 89(1) read along with Rule 21A.
In simple words, you are saved from paying more tax because of delay in payment to you.
Income Tax Notice for Non-filing of Form 10E
Starting income tax returns for the financial year 2014-15 (the assessment year 2015-16), the Income Tax Department has made it mandatory to file Form 10E if you want to claim relief under Section 89(1).
Taxpayers who have claimed relief under Section 89(1) but have not filed Form 10E have received an income tax notice from the Tax Department stating that –
The relief u/s 89 has not been allowed in your case, as the online form 10E has not been filed by you. The furnishing of Online form 10E is required as per sec.89 of the Income Tax Act