Arrears push you into a higher slab in the year you receive them. Section 157 (the old 89(1)) undoes that. This recomputes each past year on that year’s own slabs and its own regime — which is what the law requires and what most tools skip.
FY start, total income as returned, arrears for that year, regime. Regime is old or new — use whichever you actually filed that year, not today’s. Supported: FY 2022-23 onwards.
8th Pay Commission arrears are coming. Without this relief you pay tax at today’s slab on money you earned years ago.
The statute works by comparing two worlds. Difference A is the extra tax you pay this year because the arrears landed now: tax on this year’s income including arrears, minus tax excluding them. Difference B is the tax you would have paid had each instalment been taxed in the year it related to. Relief = A − B. If B is the larger figure, there is no relief — and that is a legitimate outcome, not an error.
New-regime slabs were restructured in FY 2023-24, again in FY 2024-25, and again in FY 2025-26. The 87A rebate moved from ₹12,500 to ₹25,000 to ₹60,000, and its marginal-relief break-even differs every year — ₹7,27,778, then ₹7,22,222, then ₹12,70,588. A calculator that applies one slab table across all years will produce a wrong number. This one holds a separate table per year.
When a past year is recomputed, the law looks at that year as it was — including the regime you actually opted for in that year’s return. The new regime only became the default from FY 2023-24, so most FY 2022-23 recomputations are old-regime. We ask you per year rather than assuming, because it changes the answer materially.
Often it is not the slab rate at all — it is the rebate cliff. Adding arrears to a past year can push that year past ₹5 lakh, ₹7 lakh or ₹12 lakh and wipe out the entire rebate. That single effect frequently produces more relief than the rate difference does.
Form 10E is replaced by Form 39 from Tax Year 2026-27, under Section 157(1) of the Income-tax Act 2025. It must be filed on the portal before you file the return. If you claim relief in the ITR without filing it, the return is processed but the relief is disallowed and you learn about it through a Section 143(1) intimation. The claim itself is not the problem; the missing form is.
The calculator does the arithmetic. TaxSphere — our free case-law library, 1,184 authorities and the Act in full — has the judgments, the circulars and the statutory text for the same provision.
