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Work out your Section 89(1) tax relief on salary arrears — with standard deduction applied correctly for both years — before filing Form 10E.
Received salary arrears this year and worried it's pushed you into a higher tax slab? The section 89 relief calculator with standard deduction works out exactly how much extra tax you're being charged because of the arrears — and how much relief you can legally claim under Section 89(1), before you file Form 10E.
This is a free tool for salaried employees and pensioners who've received salary arrears, advance salary, or family pension arrears in the current financial year. It applies the correct standard deduction — ₹75,000 under the new regime, ₹50,000 under the old regime — for both the current year and the year the arrears relate to, then computes your Section 89(1) relief. It's built for salaried individuals, corporate and government employees, and pensioners who need this number before filing Form 10E.
Arrears push your reported income up in the year you receive them, even though the money was actually due in an earlier year. Without relief, you'd end up paying tax at this year's higher slab on income that really belonged to a lower-slab year. This calculator removes that guesswork by running both years' numbers side by side.
Relief under Section 89(1) is computed using Rule 21A of the Income Tax Rules:
Step A = Tax on (current year income incl. arrears) − Tax on (current year income excl. arrears)
Step B = Tax on (arrear year income incl. arrears) − Tax on (arrear year income excl. arrears)
Relief = Step A − Step B (if positive; else relief = 0)Both incomes are computed after subtracting the applicable standard deduction for that year and regime, then taxed at that year's slab rates, rebate, and cess — never a single flat-year calculation.
Say Priya, a salaried employee under the new regime, received ₹3,00,000 in salary arrears in FY 2025-26 for work done in FY 2023-24.
Priya can claim ₹58,500 as relief under Section 89(1) after filing Form 10E.
For FY 2025-26 (AY 2026-27), the new regime standard deduction stays at ₹75,000 and the old regime at ₹50,000 — Budget 2026 made no change to either figure. New regime slabs run in ₹4 lakh bands: nil up to ₹4 lakh, 5% up to ₹8 lakh, 10% up to ₹12 lakh, 15% up to ₹16 lakh, 20% up to ₹20 lakh, 25% up to ₹24 lakh, and 30% beyond. The Section 87A rebate under the new regime remains at ₹60,000, keeping net taxable income up to ₹12 lakh tax-free — so if your current-year income (excluding arrears) already falls under ₹12 lakh, most of your relief calculation hinges on how the arrears alone push you past that threshold. Filing Form 10E is mandatory before your ITR if you want to claim this relief — if you claim it without filing Form 10E, the income tax department can disallow the relief during processing. Form 10E is also being referred to as Form 39 under the Income Tax Act 2025 in some secondary commentary [VERIFY — no direct CBDT/incometax.gov.in notification found confirming this renumbering or its effective date; confirm on the e-filing portal before relying on it].
Yes. Filing Form 10E online before your ITR is mandatory. If relief is claimed without it, your return may still process, but the relief itself can be disallowed by the department.
Yes. Each year — the current year and the year the arrears relate to — uses its own standard deduction amount and slab rates, not a single common figure.
Yes, relief under Section 89(1) is available under both the old and new tax regimes, as long as Form 10E is filed correctly with the applicable regime for each year.
Break the arrears up year-wise and repeat this calculation for each year separately, then add up the relief from each year in Form 10E's Annexure I.
No. If the arrear year's extra tax works out higher than the current year's, no relief is allowed — the relief is never below zero.
No, submitting it to your employer isn't mandatory, but filing it on the income tax e-filing portal before your ITR is.
Calculations verified by our team including CA Anita Patil. View our full accuracy policy and meet the team →
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