<div class="available-content"><div class="body markup" dir="auto"><div data-component-name="AudioEmbedPlayer" data-drag-handle="" class="audio-embed tw-my-4 tw-box-border tw-flex tw-w-full tw-select-none tw-items-center tw-gap-4 tw-space-y-0 tw-rounded-full tw-bg-pub-wash tw-p-4 tw-font-sans sm:tw-gap-5"><div class="audio-button tw-w-12 tw-cursor-pointer tw-rounded-full tw-border tw-border-solid tw-border-pub-detail-light tw-py-1 tw-text-center tw-font-meta tw-text-sm tw-font-semibold tw-leading-none tw-text-pub-secondary-text hover:tw-border-pub-detail">1×</div><div class="tw-flex tw-w-full tw-flex-wrap"><div class="tw-flex tw-w-full tw-items-center tw-justify-between tw-gap-2 sm:tw-gap-4"><div class="tw-flex tw-grow tw-items-center tw-gap-3 tw-font-meta tw-text-sm tw-text-substack-primary sm:tw-gap-3"><div class="tw-min-w-[40px] tw-text-right">0:00</div><div class="tw-relative tw-h-5 tw-grow "><div class="audio-progress-bar tw-absolute tw-top-2 tw-right-0 tw-left-0 tw-h-1 tw-rounded tw-bg-pub-detail"></div><div class="tw-absolute tw-top-2 tw-left-0 tw-h-1 tw-rounded-l-full tw-bg-pub-accent" style="width: 0%;"></div><div class="audio-playhead tw-absolute tw-ml-[-10px] tw-h-4 tw-w-4 tw-rounded-full tw-border-2 tw-border-solid tw-border-pub-background tw-bg-pub-accent" style="left: 0%;"></div></div><div class="tw-min-w-[40px]">-6:00</div></div></div></div><div class="audio-embed-play-button tw-relative tw-flex tw-h-12 tw-w-12 tw-shrink-0 tw-cursor-pointer tw-items-center tw-justify-center tw-rounded-full tw-border-2 tw-border-solid tw-border-pub-detail tw-bg-pub-background tw-transition-transform hover:tw-scale-105" role="button"><svg role="img" width="18" height="18" viewBox="0 0 16 16" fill="none" stroke-width="1.8" stroke="none" xmlns="http://www.w3.org/2000/svg" class="tw-relative tw-left-[.1rem] tw-fill-pub-accent" style="height: 18px; width: 18px;"><g><title></title><path d="M3.35866 16C2.58101 16 2 15.4101 2 14.4447V1.55531C2 0.598883 2.58101 0 3.35866 0C3.75196 0 4.10056 0.134078 4.54749 0.393296L15.1575 6.54302C15.9531 7.00782 16.3106 7.39218 16.3106 8C16.3106 8.61676 15.9531 9.00112 15.1575 9.45698L4.54749 15.6067C4.10056 15.8659 3.75196 16 3.35866 16Z"></path></g></svg></div></div><audio src="/api/v1/audio/upload/184e46fb-e001-45b3-ba02-4c102480dd45/src" preload="auto">Audio playback is not supported on your browser. Please upgrade.</audio><p><span>Did you know that a single clause in the Income Tax Act could save you thousands? It's true! </span><strong>Section 89(1)</strong><span> is a hidden gem that many taxpayers overlook, but it can make a huge difference in your tax planning. That's why in this edition of the JJ Tax Newsletter we’re going to explain everything you need to know about this amazing provision.</span></p><div class="captioned-image-container"><figure><a class="image-link is-viewable-img image2" target="_blank" href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png" data-component-name="Image2ToDOM" rel=""><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png 424w, https://substackcdn.com/image/fetch/w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png 848w, https://substackcdn.com/image/fetch/w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png 1272w, https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png" width="829" height="526" data-attrs="{"src":"https://substack-post-media.s3.amazonaws.com/public/images/395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png","srcNoWatermark":null,"fullscreen":null,"imageSize":null,"height":526,"width":829,"resizeWidth":null,"bytes":98722,"alt":null,"title":null,"type":"image/png","href":null,"belowTheFold":false,"topImage":true,"internalRedirect":null}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png 424w, https://substackcdn.com/image/fetch/w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png 848w, https://substackcdn.com/image/fetch/w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png 1272w, https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F395fc0b4-f5b3-472d-93b7-373e3061ff0b_829x526.png 1456w" sizes="100vw" fetchpriority="high"></picture><div class="image-link-expand"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 "><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></a></figure></div><p>Section 89(1) of the Income Tax Act, is a clause that can make a huge difference in finances. How? Well, it allows taxpayers to claim relief from tax liability arising due to the receipt of arrears or advance salary or pension in a financial year.</p><blockquote><p><strong>What is the relief under Section 89 of Income Tax Act?</strong></p></blockquote><p>This relief is based on the principle that the taxpayer should not be taxed at a higher rate than what he or she would have paid if the income had been received in the year to which it belongs.</p><p>Section 89(1) provides a formula to calculate the amount of relief, which involves adjusting the tax liability for the current and previous years after calculating the income with the arrears or advance received. The difference between the actual tax paid and the recomputed tax is the amount of relief that can be claimed by the taxpayer.</p><p>To determine the relief under Section 89(1), you need to follow a specific calculation method. This method involves comparing the tax payable on the total income, including the arrears or advance salary, with the tax payable on the total income without considering the arrears or advance salary. The difference between these two calculations is the relief amount.</p><blockquote><p><strong>Benefits and Key Considerations:</strong></p></blockquote><p>The primary benefit of Section 89(1) is that it helps individuals in managing their tax liability more efficiently when they receive salary arrears or advance salary. By distributing the tax burden over the relevant years, taxpayers can avoid being pushed into higher tax brackets due to a one-time increase in income.</p><blockquote><p><strong>Filing for Relief under Section 89(1): A Step-by-Step Guide</strong></p></blockquote><p>If you have received salary arrears or advance salary and want to avail relief under Section 89(1) of the Income Tax Act, filing the appropriate form and providing the necessary details is crucial. To help you navigate this process smoothly, we have prepared a step-by-step guide on how to file for relief under Section 89(1):</p><p><em><strong>Step 1:</strong><span> </span><strong>Obtain Form 10E</strong></em></p><p>To initiate the process, you need to obtain Form 10E from the Income Tax Department's official website or your jurisdiction's tax office. Form 10E is specifically designed for claiming relief under Section 89(1). Make sure to download the latest version of the form to ensure accuracy.</p><p><em><strong>Step 2:</strong><span> </span><strong>Gather the Required Information</strong></em></p><p>Before filling out the form, gather the necessary information and documents, including:</p><ul><li><p>Your personal details such as name, address, PAN (Permanent Account Number), etc.</p></li><li><p>Employer details, including name, address, and TAN (Tax Deduction and Collection Account Number).</p></li><li><p>Salary details for the relevant financial years, including arrears or advance salary received, month-wise breakup, and tax deducted at source (TDS) details.</p></li></ul><p><em><strong>Step 3:</strong><span> </span><strong>Complete Form 10E</strong></em></p><p>Now, fill out Form 10E accurately and legibly. Provide the required information in the appropriate sections, including your personal details, employer details, and salary details for each financial year involved.</p><p><em><strong>Step 4: Calculate the Relief Amount</strong></em></p><p>Using the information gathered, perform the necessary calculations to determine the relief amount under Section 89(1). This calculation involves comparing the tax payable on the total income (including arrears/advance salary) with the tax payable on the total income without considering the arrears/advance salary. The difference between these two calculations is the relief amount.</p><p><em><strong>Step 5:</strong><span> </span><strong>Attach Supporting Documents</strong></em></p><p>To substantiate your claim, attach relevant supporting documents such as salary slips, Form 16, Form 26AS, and any other documents that validate the salary arrears or advance salary received.</p><p><em><strong>Step 6:</strong><span> </span><strong>Submit the Form</strong></em></p><p>Once you have completed Form 10E and attached the supporting documents, make multiple copies for your records. Then, submit the form to your employer or the relevant income tax authority, depending on the guidelines provided by your jurisdiction's tax department.</p><p><em><strong>Step 7:</strong><span> </span><strong>Retain Acknowledgment</strong></em></p><p>After submitting the form, ensure you receive an acknowledgment from your employer or the income tax authority. This acknowledgment serves as proof of submission and should be retained for future reference.</p><p>By properly calculating the tax liability and distributing it over the relevant years, individuals can manage their finances more effectively and avoid unnecessary burdens.</p><blockquote><p><strong>Bottom Line</strong></p></blockquote><p>Remember, JJ Tax is committed to keeping you informed and empowered in all tax matters. Stay tuned for our next edition, where we'll bring you more valuable insights and expert guidance.</p><p>Until then, if you have any questions or need assistance, don't hesitate to contact our team. We're always here to help you navigate the intricate world of taxation.</p></div></div>