## Relief under Section 89

Relief addresses the unfairness when bunched/arrear receipts push income into a higher tax bracket than if they had been taxed in the years to which they relate.

### Relief for arrears or advance salary

Available if arrears, advance salary, salary for more than 12 months, or a payment under Section 17(3) causes income to be taxed at a higher rate.
Relief is granted by the Assessing Officer on application.
The computation procedure is laid down in Rule 21A.

### Relief for family pension

Available for arrears of family pension (as defined in Section 57(iia)).

### No relief where VRS exemption claimed

No relief is available on amounts received on voluntary retirement / termination if the exemption under Section 10(10C) has been claimed.

Worked example

### Example 1

Salary arrears: An employee receives ₹3,00,000 as salary arrears in PY 2025-26 relating to earlier years, pushing him into the 30% slab. He can apply for relief u/s 89 computed under Rule 21A — spreading the arrears notionally over the relevant years to reduce the incremental tax.

### Example 2

VRS + relief bar: An employee claims the ₹5,00,000 exemption u/s 10(10C) on voluntary retirement. He cannot additionally claim Section 89 relief on the same VRS amount.

⚠️ Common exam mistakes

Claiming both Section 10(10C) VRS exemption and Section 89 relief on the same receipt — the two are mutually exclusive.
Forgetting that relief is computed per Rule 21A, not on a simple averaging guess.
Overlooking that family pension arrears also qualify for relief.

Reference: Section 89 (read with Rule 21A); Section 57(iia); Section 10(10C) — Income-tax Act, 1961

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