Chapter IX - Rebates and Reliefs
Section 157
Section 157: relief when salary is paid in arrears or advance
Section 157 is the relief provision for a common problem: receiving several years' worth of salary-type income in one tax year (arrears, or an advance) can push a taxpayer's income into a higher slab than they would have faced had the amount been taxed in the years it actually related to. This section lets the Assessing Officer grant relief to smooth that out.
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Need advice on Section 157?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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 may be prescribed.
(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.
Introduction
Receiving salary or family-pension amounts outside their ordinary timing can push a taxpayer into a higher rate. Section 157 provides prescribed relief on application for the listed receipts, with a specific bar where the corresponding Section 19 deduction was claimed.
Key takeaways
Income bunched into one year
A taxpayer whose tax rate rises because salary is received in arrears or advance, more than twelve months’ salary is received together, or specified employment receipts or family-pension arrears arise may seek prescribed relief.
Application and exclusion
The Assessing Officer grants the relief on application; it does not apply to income already covered by the specified Section 19 deduction.
When relief is available
Relief is available where an assessee's total income gets assessed at a higher rate because of any of the following receipts:
- A sum in the nature of arrear or advance salary
- Salary for more than twelve months received in a single tax year
- A payment in the nature of "profits in lieu of salary" under Section 18(1)
- Arrears of "family pension" as defined in Section 93(1)(d)
How to claim it
The Assessing Officer grants the relief on an application made by the assessee, in the manner prescribed - it is not automatic and must be actively claimed.
A condition worth noting
No relief is granted on income for which a deduction has already been claimed under Section 19(1) (Table Sl. No. 12) - the relief and that specific deduction are mutually exclusive for the same amount.
Assess the rate effect
The section requires that the listed receipt cause total income to be assessed at a higher rate than otherwise. Preserve the year to which the arrear or advance relates so the prescribed relief can be calculated.
Step-by-step flow for applying Section 157
- 1
Did the assessee receive one of the listed receipts?
Arrear or advance salary; salary for more than twelve months in one tax year; profits in lieu of salary under section 18(1); or arrears of family pension as defined in section 93(1)(d).
- No: Section 157 does not apply.
- Yes: Go to the next step.
- 2
Is total income assessed at a higher rate than it otherwise would have been because of that receipt?
- No: No relief.
- Yes: Go to the next step.
- 3
Has a deduction been claimed on the same income under section 19(1) (Table: Sl. No. 12) for this or any other tax year?
- Yes: No relief on that income under Section 157(2).
- No: Go to the next step.
- 4
Apply to the Assessing Officer
Relief is granted on the assessee's application, as prescribed. The computation method is left to the rules, not stated in the section.
Practical checklist
Do
- Identify the receipt category and retain employer or pension records by year.
- Apply to the Assessing Officer using the prescribed relief computation and check Section 19(1)'s exclusion.
Avoid
- Do not assume relief applies to every lump-sum receipt.
- Do not claim this relief on income for which the specified Section 19 deduction was claimed.
Illustrative example
Illustration: salary arrears paid in a later year
Hypothetical facts (illustration only, not a real taxpayer): Ms. Gupta's employer revises pay with retrospective effect and pays her arrears relating to two earlier tax years in the current tax year. Including the arrears pushes her current-year total income into a higher rate. She has not claimed any deduction on the arrears under section 19(1) (Table: Sl. No. 12).
Listed receipt
The arrears are a sum in the nature of arrear salary under clause (a).
Rate effect
Because the arrears are taxed in one year, her income is assessed at a higher rate than it otherwise would have been.
Exclusion check
No section 19(1) (Table: Sl. No. 12) deduction was claimed on this income, so Section 157(2) does not bar relief.
Application
She applies to the Assessing Officer in the prescribed manner, keeping the employer's year-wise break-up of the arrears.
Outcome
- On her application, the Assessing Officer shall grant the relief computed as prescribed; it is not given without an application.
- No amount is shown here because the method of computing the relief is prescribed separately, not set out in Section 157.
Glossary
- Salary arrears
- Salary for an earlier period received in the current tax year.
- Profits in lieu of salary
- A receipt category cross-referenced to Section 18(1).
Frequently asked questions
Is this the same as the relief people call "Section 89(1)" under the old Act?
It serves the same purpose - relief for arrears or advance salary pushing you into a higher tax bracket - but it is Section 157 under the Income-tax Act, 2025.
Do I automatically get this relief when I receive salary arrears?
No - you must apply to the Assessing Officer for it in the prescribed manner; it isn't applied automatically just because arrears were received.
Does this cover family pension arrears too?
Yes - arrears of family pension as defined in Section 93(1)(d) are specifically covered alongside salary arrears, advance salary, and profits in lieu of salary.
Need help applying this provision to your situation?
Check if you're eligible for Section 157 reliefLast updated 9 October 2026