Tax relief on salary arrears under section 157(1), worked the way Form 39 asks
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 30 Oct 2026.Relief on salary arrears equals the extra tax the arrears cause in the year you receive them minus the extra tax they would have caused in the years they belong to. For arrears received in FY 2026-27 it is claimed under section 157(1) in Form No. 39, filed before your return.
FY 2026-27 · Rates and rules read from the sources listed on this page (the earliest on 30 Oct 2026); they may have changed since.
Pick the Regime for 2026-27 and Your age band.
Enter the Total income for 2026-27, arrears included.
For Earlier year 1, choose the Year the arrears belong to, enter the Arrears for that year and that year's income and regime; press Add another year for more.
Read Relief you can claim and 2026-27 tax after relief, and open Form 39 working for the figures to copy into the form; Share result copies a link.
Arrears of salary are taxed in the year you receive them, which can push a whole year's income into a higher slab. Section 157(1) of the Income-tax Act, 2025, which replaced section 89(1) of the 1961 Act, gives relief for that. Rule 73 of the Income-tax Rules, 2026 sets out the working, and Form No. 39 prints it as a table. This calculator follows that table line by line.
The working. First, the tax on your 2026-27 total income with the arrears (C) and without them (D); the difference, A, is what the arrears cost this year. Then, for each earlier year the arrears belong to, the tax on that year's total income with its share of the arrears (F) and without (G); the difference is E. Add up every E to get B. If A is more than B, the relief is A minus B. If not, there is no relief, and filing Form 39 gains nothing.
Which years it computes. Tax here means tax after the rebate, plus 4% cess. The slab tables for FY 2020-21 to FY 2025-26 were read in the Finance Acts and the Act itself, for both the old and the new regime, and FY 2026-27 uses the rates now in force. Surcharge is modelled for FY 2025-26 and 2026-27 only; for an earlier year above ₹50 lakh, or for a year before FY 2020-21, switch that row to hand entry and copy the tax from that year's return.
Enter total income, not salary. Every figure is total income after the deductions your regime allowed, because that is what the tax tables apply to. Use the regime you actually filed under in each year.
What it does not do. It covers arrears received in FY 2026-27 only; arrears received earlier are claimed under section 89 with Form 10E. It does not handle gratuity, retrenchment compensation or commuted pension, which rule 73 treats differently. Rule 73(3) requires Form 39 by the return's due date, so file it before the return itself.
Work out the extra tax the arrears cause in the year you receive them (A). Then, for each year the arrears belong to, work out the extra tax they would have caused there, and add those up (B). Relief is A minus B when A is larger. Rule 73 of the Income-tax Rules, 2026 prescribes exactly these steps.
Section 157(1). The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, and section 157 now gives relief when salary is paid in arrears or in advance, or when family pension arrears arrive. The working is in rule 73 of the Income-tax Rules, 2026, and the claim is made in Form No. 39.
Yes. Section 157 is not among the provisions that section 202(2) switches off for the new regime, so the relief applies whichever regime you use. What changes is the slab table: each year is taxed under the regime you actually filed under for that year, which is why every row here has its own regime choice.
Rule 73(3) requires Form No. 39 on or before the due date for the return under section 263(1)(c). File it before the return itself. An employee of the government, a company or a similar body may also give the same particulars to the employer, who can then allow the relief while deducting tax from salary.
Relief exists only when the arrears cost more tax in the year of receipt than they would have in their own years. If your income was higher earlier, or the old slabs were steeper, B can exceed A. Then there is nothing to claim, and filing Form 39 would not reduce your tax.
Not directly. Arrears received in FY 2025-26 or earlier fall under section 89 of the 1961 Act, claimed in Form 10E, and this page computes only FY 2026-27 as the year of receipt. The earlier-year rows still work for checking the tax each year, but the headline relief assumes 2026-27 rates.
Rates and rules change; check the source before you rely on a figure.
Still stuck? Ask about Arrears Relief Calculator and anybody who knows can answer. No account needed.
Also works as: Section 89(1) Relief Calculator.
Same job, other tools: Marginal Relief Calculator – How marginal relief cuts the tax on income just above ₹12 lakh in the new regime · New Tax Regime Calculator – Tax under the default regime, including the rebate and marginal relief · TDS on FD for Senior Citizens – Whether a bank deducts TDS on a senior citizen’s FD interest under the ₹1 lakh limit · Capital Gains on Property – Both routes on a flat or land: 12.5% plain, or 20% after indexation, whichever costs less · LTCG Calculator – Long-term capital gains tax at 12.5%, with the first ₹1.25 lakh on shares left out.
On the related tools: GST Inclusive Calculator – Split a price that already includes GST into value and tax.
More for India: all 48 India calculators.