VRS / Severance Pay full exemption u/s 89 ( 10E form filling )

For amounts exceeding Rs.5 lakhs , you can claim relief under section 89 by filing Form 10E. This provides tax relief by spreading the income over previous years for tax calculation purposes.

To fill Form 10E: 

Calculate the tax relief by considering the spread of the severance pay over previous years.

Submit Form 10E along with your income tax return.

You can claim relief on the balance (Rs.11.9 lakhs) under Section 89 using Form 10E. 

Thanks Rama Sir ,

Can you kindly elaborate !

1. Why and how to calculate tax relief ? my case it's showing some 10+ lakhs liability to my surprise 
2. However If I pit 11.9 lakhs u/s 89 , taxes are being nullified but I'm not sure how to fill up 10E form .
3. How to spread remaining 11.9 lakhs over previous years in form 10E , so that all 11.9 lakhs are exempted ?

Kindly help .

Best Regards

When claiming relief under Section 89, Form 10E needs to be filled out. This form requires details about the arrears received and the years to which they relate. The form helps in claculating the relief by spreading the arrears over the relevant years. If the taxes are being nullified upon claiming 11.9 lakhs under Section 89, it indicates that the relief is being correctly applied. To fill out /form 10E, one needs to provide the financial year in which the arrears were received, the amount of arrears and the years to which these arrears relate. 

You need to identify the years to which the arrears relate and then allocate the amount accordingly. The form requires you to break down the arrears into the respective years and calculate the tax relief for each year. The total relief claimed shold not exceed the amount of arrears. Thereby exempting the specified amount from taxation. 

Thanks Ji ,

I'm not able to fill up form 10E to get exact 11.9 lakhs exemption . the calculation is complicated , if I spread over the compensation(16.9 lakhs) into 3 years of arrears , then tax relief comes becomes very minimal ( 2 lakhs only , not 11.9 lakhs ).

10E asks for previous year incomes / taxes paid , if I put exact figures from previous form-16s , I'm not getting 11.9 lakhs relief , without which it's not serving the purpose .

Any kind hearted person seeing my response , kindly help , I dont have money to pay these mammoth taxes anymore . 

Best Regards