When clients receive arrears of salary, gratuity, or advance salary, their tax liability for the year can spike, pushing them into a higher slab. Section 89(1) of the Income Tax Act offers relief — but only if Form 10E is correctly filed before claiming it in the ITR.

For CAs, a misstep here can lead to ITR processing errors, refunds getting withheld, or demands from the CPC. This guide breaks down exactly what you need to do to file Form 10E accurately for your clients.

When is Form 10E Required?

Form 10E must be filed if your client has:

• Salary received in arrears or in advance.

• Family pension received in arrears.

• Gratuity for past services.

• Compensation on termination of employment.

• Commuted pension.

Step-by-Step Filing Process for Form 10E

Step 1: Gather Required Data

Before logging in to the e-Filing portal, collect:

• Year-wise breakup of arrears (from employer salary statements).

• Proof of gratuity or pension payment.

• Details of salary/pension for both the current year and the year(s) to which arrears relate.

• Previous years’ ITR copies (for tax computation reference).

Step 2: Log in to the e-Filing Portal

• Visit www.incometax.gov.in.

• Log in using the client’s credentials (PAN and password).

• Ensure CA is registered in the client’s “My CA” section if you are filing on their behalf.

Step 3: Locate Form 10E

• Navigate to e-File → Income Tax Forms → File Income Tax Forms.

• In the search box, type “10E”.

• Select Form 10E – Relief under section 89(1).

Step 4: Select the Assessment Year

• Choose the assessment year relevant to the ITR in which relief is claimed.

• Example: Arrears received in FY 2024-25 → Assessment Year 2025-26.

Step 5: Fill in the Correct Annexures

Form 10E contains different annexures depending on the type of income:

• Annexure I – Salary arrears/advance.

• Annexure II & IIA – Gratuity for past services of 5–15 years or more than 15 years.

• Annexure III – Compensation on termination of employment.

• Annexure IV – Commuted pension.

For salary arrears (most common):

• Enter total income for the year of arrears including arrears.

• Enter total income for the year of arrears excluding arrears.

• Repeat the same for the current year.

• The system automatically calculates the relief amount.

Step 6: Verify and Submit

• Preview the form to check for data mismatches.

• Submit using Aadhaar OTP or DSC.

• Download the acknowledgment PDF for your client’s records.

Key CA Compliance Tips

1. File Before ITR – If Form 10E is not filed before ITR submission, the relief claim will be ignored, and CPC will raise a demand.

2. Match Employer Annexure – Always cross-verify figures with the Annexure to Form 16 to avoid mismatches.

3. Multiple Arrears Years – Fill separate rows for each year to which arrears relate.

4. Document Storage – Keep a digital copy of employer certificates and computation workings in case of future assessment queries.

5. Refund Delays – The most common reason for refund hold-ups is missing Form 10E when relief is claimed.

Common Mistakes to Avoid

• Filing for the wrong assessment year.

• Using total arrear amount without year-wise breakup.

• Claiming relief for non-eligible payments like bonuses (not covered).

• Mismatched figures between Form 10E and ITR schedules.

  
  

For Chartered Accountants, Form 10E is more than a compliance form — it’s a client satisfaction factor. Correct filing means lower tax liability, faster ITR processing, and fewer CPC notices. Building a standard Form 10E checklist for your firm can cut errors by over 90%.

💡 Pro Tip: Use Unpaper’s Client & Compliance Tracker to flag arrear cases early in the financial year, prepare year-wise computations in advance, and store Form 10E acknowledgments for all clients in one secure place.