Form 10E is an essential document for Indian taxpayers seeking relief under Section 89(1) of the Income Tax Act, 1961. This section is particularly advantageous for those receiving income in arrears or advance, such as backdated salary or family pension payments. By submitting Form 10E, taxpayers can alleviate the extra tax burden that may result from these lump-sum payments.

The purpose of Form 10E is to prevent a lump-sum payment from pushing an individual’s total income into a higher tax bracket, which would increase their tax liability. Section 89(1) allows taxpayers to spread the arrears over the relevant years, enabling a recalculation of tax for each year involved. This ensures that taxpayers do not incur a higher tax than they would have if the income had been received in the correct years, making the filing of Form 10E a necessary step to access this relief.