1What is Section 89 relief?
Relief that re-spreads salary arrears or back-pay to the years they relate to , so you don't pay extra tax just because a lump sum was bunched into one year and pushed you into a higher slab.
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ArticleA lump sum of arrears or back-pay can push you into a higher slab in the year you receive it, even though it was earned over several years. Section 89 relief fixes that. Here's how it works.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-13
Quick answer
If you receive salary arrears or back-pay, Section 89 re-spreads it to the years it relates to, softening the slab hit. Here's how to claim it.
When you receive salary in arrears — a delayed increment, revised pay or back-pay — it's taxed in the year you receive it, which can bunch several years' income into one and push you into a higher slab. Section 89 relief prevents you from paying more tax simply because of the timing.
The relief works by comparing two scenarios: the tax with the arrears bunched into the current year, versus the tax if the arrears had been taxed in the years they actually relate to. The difference is the relief you can claim, reducing your current-year tax.
To claim Section 89 relief you must file Form 10E on the income tax portal before claiming it in your return. Skipping Form 10E is the most common reason the relief is disallowed, so file it first.
Section 89 relief can also apply to certain other lump-sum receipts taxed in one year that relate to multiple years — such as some retirement or commutation payments — within the rules. If you receive a bunched payment, check whether relief applies.
Keep the year-wise breakup of the arrears and the computation, as the relief depends on allocating the income to the correct earlier years. Accurate records make the Form 10E and the claim straightforward.
Relief that re-spreads salary arrears or back-pay to the years they relate to , so you don't pay extra tax just because a lump sum was bunched into one year and pushed you into a higher slab.
File Form 10E on the income tax portal first, then claim the relief in your return. Skipping Form 10E is the most common reason the relief is disallowed.
Mainly, but also to certain other lump-sum receipts relating to multiple years — such as some retirement or commutation payments — within the rules. Check if a bunched payment qualifies.
Received arrears or back-pay? Write to the firm and we'll compute your Section 89 relief and file Form 10E.