When salary for another year is paid now

The opening line is a rate comparison. Relief is there when your total income is assessed at a higher rate than it would otherwise have been, because of one of these receipts.

The Assessing Officer grants such relief as may be prescribed, on an application made to him. The section does not print a rupee cap, and it does not print a formula. Form 39 is the form under rule 73 for claiming the relief. The exemption rows for leave encashment and gratuity are a different table, on the leave and gratuity page.

Section 157(2) says no relief is granted on income on which you have claimed the deduction in section 19(1), table serial 12, for any amount that row mentions, for that tax year or any other tax year.

Serial 12 is an amount received or receivable on voluntary retirement, or on termination of service under a voluntary retirement scheme, by an employee the subsection refers to. The deduction is the minimum of the compensation received and ₹5,00,000. The section prints ₹500000.

The same table has the reverse line. Where relief under section 157 has been allowed for any tax year on an amount in that serial, that amount is not allowed as a deduction from the compensation in any tax year. The two lines are separate. One stops the relief after the deduction. The other stops the deduction after the relief.

The FAQ table prints four pairs. This page leaves them as printed.

The FAQ and the guidance note say Form 39 is for additional salary (arrears or advance), family pension, gratuity, retrenchment compensation, commutation of pension, and similar receipts. The note splits gratuity into past service under 15 years and past service of 15 years or more. Section 157's four clauses do not use those words. This page does not force gratuity, retrenchment, or commutation into clause (c).

The FAQ says an individual taxpayer who is an employee. The note says a taxpayer who is an employee. Both say you file Form 39 if you want the relief. The FAQ's later answer says filing is mandatory if you are claiming relief under section 157(1).

Section 392(4)(a) is a different sentence. The particulars are at the employee's option. Clause (ii) is relief under section 157, and only where you are a Government servant, or an employee in a company, co-operative society, local authority, university, institution, association or body. The FAQ uses that same list and says you may give Form 39 to the person who deducts tax under section 392, so the deduction can take the relief into account. "At his option", "may furnish", "required if you wish to claim", and "mandatory if you are claiming" all appear on the department pages, and each one stays.

Note 3 on Form 39 says each receipt follows the matching entry in the table in rule 73(1). Any other receipt follows rule 73(2). The form does not print sub-rule (2). Amounts are in rupees. There is no worked salary on the form, and this page does not add one.

Row 3 is additional salary, in arrears or in advance, or additional family pension. You split the extra pay across the tax years it belongs to. For each of those years the form asks for the amount, the total income, the tax on that income, the income after adding the extra pay, and the tax on that higher income. Column G is that second tax minus the first, which is the tax the extra pay would have caused in the year it relates to.

Then it turns to the year you received the money. Tax on the year's total income, minus tax on that income after the extra pay is taken out, is the tax the extra pay caused in the year of receipt. Relief is allowed only when that figure is greater than the total of column G. If the answer is yes, relief is the year-of-receipt figure minus the total of column G.

Rows 4 to 7 use an average rate, not that subtraction. Y1 is the tax year you received the money. R1 is the tax on Y1's total income divided by that total income. The form calls R1 the average rate of tax on Y1. RA is an average of average rates from earlier years. Relief is allowed only when R1 is more than RA. If the answer is yes, relief is the receipt multiplied by (R1 minus RA).

Row 8 adds the receipts and the relief from rows 3 to 7, and it has a line for any other receipt. Row 9 is the total relief for the tax year, from column B of row 8's total. The guidance note says that total is auto-reflected and then auto-filled in the return. The form itself does not say which return.

The form does not print a minimum of five years for gratuity, and it does not say to drop the exempt part of the gratuity before row 4. Those lines are on the older note below. It also does not name a provident-fund withdrawal.

The FAQ says the time limit for Form 39 is not prescribed in the Income-tax Act, 2025, or in the rules. It then says it is advisable to file at least three months before you claim the relief in the return. For the employer deduction, it says the particulars may be given well before the end of the relevant tax year, so the person deducting tax can use the relief. Those are three statements. This page does not turn "advisable" or "well before" into a statutory date.

You file on the e-filing portal, online only, under a digital signature or an electronic verification code. The note's steps are: log in, open e-File, then Income Tax Forms, then File Form 39, select the relevant assessment year, fill Part A and the Part B columns that match the receipt, enter the tax figures, review column 8, submit, and file the return with the relief claimed. Part A of the form asks for the tax year, which it calls the relevant tax year as in rule 73. The steps ask for an assessment year. Both stay.

The heading above those steps still says "Process flow of filing Form 10E". The steps themselves say Form 39.

After you verify and an acknowledgement is generated, the form cannot be edited. No document is attached. Part A cannot have a blank field. The form cannot be submitted without a valid PAN. One form can cover more than one kind of receipt, in the matching section of the form.

The papers the FAQ says you may need, and then not attach, are a break-up of the receipt, a TDS certificate in Form 130, the annual information statement in Form 168, a computation for the year of receipt, and for the earlier years Form 130 or Form 16, Form 168 or Form 26AS, the returns, and the computations. It also lists proof of the lump sum, such as the employer's letter, a pension order, or a retrenchment order. The note adds the PAN to that list.

The note says a missing Form 39 can get the return marked defective, and that this holds up the filing. It does not name a section for that mark. It also says about 6 lakh Form 39 filings a year, on average, over the last five years.

The calculation page carries the banner of the Income-tax Act, 1961, as amended by the Finance Act, 2026. It is not the Form 39 note. It says relief under section 89, claimed in the return for the year you receive the lump sum, and Form 10E before you file that return. Its list is salary in arrears or in advance, arrears of family pension, premature withdrawal from a PF account, gratuity, the commuted value of pension, and compensation on termination of employment. A later line limits the PF withdrawal to one before you complete 5 years of service. Form 39 does not name that withdrawal.

For advance salary, arrears of salary, family pension, and that PF withdrawal, the page's steps are: tax this year including the receipt, tax this year excluding it, tax of the year the receipt relates to excluding it, tax of that year including it, then (step 1 minus step 2) minus (step 4 minus step 3). A positive result is the relief. A negative result is no relief.

Gratuity on that page is allowed only if you have completed 5 years of service. An exempt part gets no relief. Only the taxable part that is in gross salary does. For past service of 15 years or more, it uses the average rate of the current year including gratuity, and the average of the average rates of the previous 3 years after adding one-third of the gratuity to each of those years. Relief is the difference, and only if it is positive. For 5 years or more but less than 15 years, it uses the previous 2 years and adds one-half of the gratuity to each. Commutation of pension uses the 15-year method. Compensation on termination uses that same method only if continuous service is 3 years or more and the unexpired term is also not less than 3 years.

On voluntary retirement, that page says you claim either an exemption up to Rs. 5,00,000 or relief under section 89, not both. Section 157(2) and section 19 serial 12, above, are the 2025 Act lines. This paragraph does not renumber the 1961 note to section 157.

The rest of a salary slip, once the taxable part is known, is the salaried guide and the CTC calculator. The calculator does not work out section 157.