Salary Arrears Calculator

Work out back-dated salary arrears — and remember Section 89(1) relief via Form 10E.

Arrears periods

Add a row for each back-dated stretch, grouped by the financial year the arrears relate to — that grouping is exactly what Section 89(1) / Form 10E needs.

Your taxable income this year (FY 2026-27, before arrears)

₹

Relief regime (89(1) relief is usually figured on the old regime)

Your arrears & 89(1) relief

Total arrears—

Tax if arrears are taxed entirely this year —
Tax if spread back to the original years —
Estimated Section 89(1) relief —

Indicative estimate. Section 89(1) relief re-computes tax as if each year’s arrears had been taxed in that year; stable old-regime slabs are used for the spread years. The exact relief is what you enter on Form 10E, which must be filed before your return to claim it. Arrears per period = (revised − old) × months.

How it works

How salary arrears are calculated and taxed

Salary arrears arise when a pay revision takes effect from an earlier date than it is actually paid — for example, an April increment processed in September, with the intervening months owed as a lump sum. The arrears amount is simply the monthly difference between your revised and old salary, multiplied by the number of back-dated months. The tax point matters: arrears are taxed in the financial year you receive them, not the years they relate to, which can push you into a higher slab and inflate your tax. To avoid being penalised for the timing, you can claim relief under Section 89(1) by filing Form 10E on the income-tax e-filing portal before you submit your return — it recomputes the tax as if the arrears had been taxed in the correct years. This calculator shows the arrears figure; use the TDS calculator and your finance team for the tax relief.

FAQ

Questions, answered

How are salary arrears calculated?

For each back-dated period, arrears are the revised salary minus the old salary, multiplied by the months in that period. The calculator lets you add several periods at once and sums them into your total arrears.

What is Section 89(1) relief?

Arrears are taxed in the year you receive them, which can push you into a higher slab. Section 89(1) re-computes your tax as if each year’s arrears had been taxed in the year it actually related to, and gives you the difference as relief. The calculator estimates this relief for you.

What is Form 10E?

Form 10E is the form you file on the income-tax e-filing portal to claim Section 89(1) relief. It must be filed before you submit your return for the year, otherwise the relief can be disallowed.

Why group arrears by financial year?

Section 89(1) relief is worked out year by year. Grouping each period’s arrears by the financial year it relates to lets the calculator add them to that year’s income and recompute the tax correctly, which is exactly what Form 10E asks for.

Does every arrears payment give me relief?

No. Section 89(1) helps only when spreading the arrears across their original years lowers your total tax. If your slab is the same in both years, there is usually no relief, and the calculator will show it as nil.

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