Salary arrears, pension or FNF increasing your income tax liability? Here's which form to use to reduce tax burden

The Income Tax (I-T) department in April notified taxpayers that the old Form 10E, used to claim relief in case of salary arrears or other specified receipts, has been replaced with the new Form 39.

According to the Central Board of Direct Taxes (CBDT), Form 39 is used by a taxpayer to claim relief under Section 157(1) of the I-I Act (ITA) 2025. This is to be used in cases where you receive additional salary (arrears or advance), family pension, gratuity, Retrenchment compensation, commutation of pension, etc.

What does Form 39 do?

The form enables the taxpayer to compute and claim relief to neutralise the higher tax burden that may arise on inclusion of the above-mentioned receipts in the total income of the current year.

In order to claim such relief on TDS by the employer, a Government Servant, or an employee in a company, co-operative society, local authority, university, institution, association or body, may furnish the particulars specified in Form No. 39 to the person responsible for making payments after deducting tax, as referred to in section 392 of the ITA 2025.

Who should file Form 39?

The CBDT noted that Form 39 is for use by any individual taxpayer, being an employee, who has received:

• Additional salary or additional family pension (arrears or advance)
• Gratuity for past services
• Retrenchment compensation
• Commutation of pension,

and wishes to claim relief under section 157(1) of ITA 2025, is required to file Form 39.

Notably, it is mandatory to file Form 39, if the individual is claiming tax relief under section 157(1) of the Act.

Where and how is Form 39 required to be filed? What is the time limit?

• It should be filed on the I-T e-filing portal.
• The form shall be furnished electronically either under digital signature or through electronic verification code verified by the employee.
• Notably, there is no time limit for filing Form 39 under ITA or I-T rules, however, it is advisable to file the form at least three months prior to claiming relief in the return of income.
• Further, in order to claim relief on TDS by the employer, the particulars specified in Form 39 should be furnished well before the end of the relevant Tax Year, so as to enable the person responsible for deducting tax to take the admissible relief into account, while making the TDS.

What documents are required to file Form 39?

• Break-up of receipts for which relief is being claimed (additional salary, gratuity, etc.)

• TDS Certificate in Form 130, Annual Information Statement in Form 168, computation of income and tax liability for the relevant Tax year (the year of receipt)
• TDS Certificate in Form 130 or Form 16, Annual Information Statement in Form 168 or Form 26AS, ITRs and computation of income and tax liability for the earlier Tax years to which the amount relates
• Proof of lump-sum receipts, such as employer’s letters, pension orders, retrenchment orders, etc.

Form 39 — Key highlights

• Once Form 39 is submitted after verification, and acknowledgment is generated, it cannot be edited. Please ensure that all the details are correct before submission.

• Form 39 cannot be submitted without a valid PAN of the individual.
• It can only be submitted online through the Income Tax e-Filing portal.
• The form has separate sections to claim relief in case of receipt of additional salary, gratuity, retrenchment compensation, etc. The individual can fill in the relevant details in the respective sections to do the needful.

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