Sub-section (1) applies where the total income of an assessee is assessed at a rate higher than the rate at which it would otherwise have been assessed, and the reason is one of four receipts: a sum in the nature of arrear or advance salary; salary for more than twelve months in any one tax year; a payment in the nature of "profits in lieu of salary" under section 18(1); or arrears of "family pension" as defined in section 93(1)(d). In that case the Assessing Officer shall, on an application made to him by the assessee, grant such relief as may be prescribed. Sub-section (2) denies relief on any income for which the assessee has claimed the deduction in section 19(1) (Table: Sl. No. 12) for any amount mentioned there, for that or any other tax year.
Why it is there
Money that belonged to several years, paid over in one, pushes an assessee up the rate scale for a reason that has nothing to do with what he actually earned in that year. The section restores the position by relief measured as prescribed. Sub-section (2) prevents the same receipt from attracting both the relief and the voluntary-retirement deduction.
Who it applies to
An employee receiving arrear or advance salary, or salary for more than twelve months in one tax year
A person receiving a payment in the nature of profits in lieu of salary under section 18(1)
A recipient of arrears of family pension as defined in section 93(1)(d)
The Assessing Officer, who grants the relief on an application
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Salary bunched into one year
More than twelve months
Salary for more than twelve months received in any one tax year is one of the four qualifying receipts
Sub-section (1)(b)
Amount of the relief
Such relief, as may be prescribed — the section states no amount or formula
Granted by the Assessing Officer on an application by the assessee
Sub-section (1)
What this means in practice
The relief is not automatic. Sub-section (1) makes the Assessing Officer's duty to grant it — and it is "shall" — arise only on an application made to him by the assessee, so a taxpayer who simply files and waits gets nothing. The measure of the relief is not in the section either: it is what is prescribed, so this section tells you when relief is due but not how much. The bar in sub-section (2) is wider than it first reads — it denies relief on income for which the section 19(1) (Table: Sl. No. 12) deduction has been claimed "for such, or any other, tax year", so a claim made in a different year still blocks it. And the trigger is not the arrears themselves but their rate effect: sub-section (1) needs the total income to have been assessed at a higher rate than it otherwise would have been.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
An individual receives 9 lakh rupees of salary arrears in one tax year, relating to earlier years, and the bunching pushes his total income into a higher rate band. On his application, the Assessing Officer is to grant the relief the rules prescribe for that situation. But if that amount is part of a voluntary retirement receipt for which he has claimed the deduction in section 19(1) (Table: Sl. No. 12) — whether in that year or any other — sub-section (2) denies him relief on it.
Where you meet this section
In the application made to the Assessing Officer for relief and in the relief reflected in the assessment; the section puts the grant in the Assessing Officer's hands, on an application, rather than leaving it to be settled in the return alone.
The words themselves
the Assessing Officer shall on an application made to him by the assessee in this behalf, grant such relief, as may be prescribed
Section 157(1), Income-tax Act, 2025.
No relief shall be granted on any income on which deduction has been claimed by the assessee in section 19(1)(Table: Sl. No. 12) for any amount mentioned therein, for such, or any other, tax year.
Section 157(2), Income-tax Act, 2025.
What people get wrong
Expecting the relief without applying for it. Sub-section (1) conditions it on an application made to the Assessing Officer by the assessee.
Stating an amount of relief from the section. It gives relief "as may be prescribed" and fixes no figure or formula.
Reading sub-section (2) as year-specific. It denies relief where the section 19(1) (Table: Sl. No. 12) deduction has been claimed for that or any other tax year.
Confining the section to salary. It also covers profits in lieu of salary under section 18(1) and arrears of family pension as defined in section 93(1)(d).
Claiming it whenever arrears are received. Sub-section (1) requires the total income to have been assessed at a rate higher than it would otherwise have been because of the receipt.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
89 - Relief when salary, etc., is paid in arrears or in advance
Rules of the Income-tax Rules, 2026 that work section 157. Where the rule’s own heading names the section we say so; the rest are marked on reading the rule, which is our derivation and not the department’s. A rule that serves the section silently and that we have missed will not appear here.
Rule 73 — Relief under section 157(1), when salary is paid in arrears or in advance, gratuity, etc.
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Circular No. 19/024 — On provisions of the direct tax vivad se vishwas scheme 2024 2024-12-16
Circular No. 12/2024 — Guidance note 1/2024 on provisions of the direct tax vivad se vishwas scheme 2024 2024-10-15
Circular No. 504 — 955. Effect of insertion of sub-sections (2), (2A) and (2B) in section 192 by the Finance Act, 1987 - Relevant rules amended to en 1988-02-08
Circular No. 431 — 624. Relief in case of encashment of leave salary by an employee while in service - Whether admissible 1985-09-12
Circular No. 331 — Section 89 l Relief When Salary ETC., Is Paid in Arrears or in Advance 1982-03-22
Circular No. 286 — Section 10(10A) l Commuted Pension 1980-11-17
Circular No. 239 — 626. Relief in the case of amounts repaid under Additional Emoluments (Compulsory Deposit) Act - Procedure laid down for working o 1978-05-16
A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.
