Mumbai, August 25: While lakhs of Central Government employees await the dearness allowance hike, they will also be paid arrears of salaries and allowances after certain implementation of the recommendations made by the 7th Pay Commission. As government employees draw salaries and pensions, it must be noted that past dues like salary arrears or pension amounts that were paid in the current year may attract a higher tax due to changes in the tax slabs.

However, there seems to be some relief. Central Government employees who have already received salary arrears can easily claim relief under Section 89 of the Income Tax Act. According to the IT Act, a person can claim tax relief for receiving salary in arrears or in advance or receipt of family pension in arrears under Section 89 (1) of the Act. 7th Pay Commission Latest News Today: DA Hike for Central Government Employees in September? Check Update Here.

In order to claim the relief, it is of utmost importance that government employees file form 10E online on the Income Tax e-filing portal. Those claiming relief under Section 89 without submitting Form 10E are very likely to get a notice from the Income Tax Department.

Steps To File Form 10E Online:

  • Visit the official website of Income Tax at http://www.incometax.gov.in

  • Click on e-File and then click on "tax Exemption and Reliefs/Form 10E"

  • Next, select the Assessment Year

  • Post this, select Annexure-I out of the 5 Annexures in Form 10E

  • Once done, Form 10E will automatically calculate the amount of tax relief available under Section 89 of the IT Act

  • After filing Form 10E, claim it in your IT Return filing in order to receive the money

Earlier in August, Pankaj Chaudhary, Minister of State for Finance told the Lok Sabha that the Centre did not receive any proposal to constitute the 8th Pay Commission. According to reports, lakhs of government employees will get a DA hike most probably by Diwali. The DA is hiked twice a year. Once in January and the second time in July.

(The above story first appeared on LatestLY on Aug 25, 2022 03:28 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).