Relief when salary, etc., is paid in arrears or in advance
[Section-157 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 157(1) of Income Tax Act 2025
157(1) Where the total income of an assessee is assessed at a rate higher than the rate at which it would otherwise have been assessed, due to the following receipts,—
- (a) a sum in the nature of arrear or advance salary; or
- (b) salary for more than twelve months in any one tax year; or
- (c) a payment in the nature of “profits in lieu of salary” under section 18(1); or
- (d) arrears of “family pension” as defined in section 93(1)(d),
the Assessing Officer shall on an application made to him by the assessee in this behalf, grant such relief, as prescribed.
Section 157(2) of Income Tax Act 2025
157(2) 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.
FAQs on Section 157(2) of Income Tax Act 2025
What is the purpose of Section 157 of the Income Tax Act, 2025?
It provides tax relief to an assessee whose income is assessed at a higher rate due to receipt of salary or similar payments in arrears or in advance.
What types of receipts are eligible for relief under Section 157(1)?
Relief is available for arrears or advance salary, salary for more than 12 months in a tax year, “profits in lieu of salary” under section 18(1), and arrears of “family pension” under section 93(1)(d).
Is the relief under Section 157(1) automatic?
No, the assessee must apply to the Assessing Officer to claim this relief.
Can relief be claimed if salary for more than 12 months is received in one tax year?
Yes, this is specifically covered under clause (b) of Section 157(1).
Is advance salary eligible for relief under this section?
Yes, advance salary falls under clause (a) of Section 157(1).
Does this section cover arrears of family pension?
Yes, relief is available for arrears of family pension as defined under Section 93(1)(d).
What is meant by “profits in lieu of salary” for the purpose of this section?
It refers to payments classified under Section 18(1), such as compensation or termination benefits that replace salary.
What happens if the assessee has claimed a deduction under section 19(1)(Table: Sl. No. 12)?
No relief shall be granted under Section 157(2) in such a case.
Can the same income be considered for both deduction under Section 19(1) and relief under Section 157?
No, relief under Section 157 is not allowed on income for which a deduction has already been claimed under Section 19(1)(Table: Sl. No. 12).
From which date is Section 157 effective?
It is effective from 1st April, 2026.
Who grants the relief under this section?
The Assessing Officer grants the relief upon receiving an application from the assessee.
What is the condition for granting relief under Section 157?
The total income must have been assessed at a higher rate due to the specified receipts, and the assessee must not have claimed a deduction under section 19(1)(Sl. No. 12) for the same income.
Is there a prescribed method for calculating the relief?
Yes, the relief shall be granted “as prescribed,” implying rules or a formula may be notified by the authorities.
Can relief be granted for income received in advance if it doesn’t increase the rate of tax?
No, relief is granted only if the total income is assessed at a higher rate due to such receipts.
Can an assessee claim relief in respect of salary arrears received for a prior year?
Yes, provided it results in a higher tax rate in the year of receipt and no deduction has been claimed for the same under Section 19(1)(Sl. No. 12).
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