## Section 89 — Relief for Arrears of Salary
When salary arrears received in the current year push the assessee into a higher tax bracket (due to bunching), Section 89 provides relief to mitigate the increased tax burden.
### 7-Step Computation
| Step | Computation |
|---|---|
| 1 | Tax liability of current year ON total income INCLUDING arrears |
| 2 | Tax liability of current year ON total income EXCLUDING arrears |
| 3 | Step 1 − Step 2 (extra tax in current year due to arrears) |
| 4 | Tax liability of year to which arrears relate, recomputed INCLUDING arrears in that year's income |
| 5 | Tax liability of year to which arrears relate, on original income (EXCLUDING arrears) |
| 6 | Step 4 − Step 5 (what extra tax would have been in that earlier year) |
| 7 | Relief = Step 3 − Step 6 |
### Final Tax Payable
> Final Tax Payable (current year) = Total Tax Liability (Step 1) − Relief (Step 7)
### Filing Requirement
Assessee must file Form 10E electronically before filing the return for the year claiming the relief.
### Logic
If Step 3 > Step 6, it means current-year bunching has caused excess tax → relief equals the excess. If Step 3 ≤ Step 6, no relief is admissible (arrears would have been taxed equally or more in the earlier year).