Is Form 10E applicable for Notice Pay received in Full & Final Settlement?

[Amit]

Hi Everyone,

I need some guidance regarding Section 89 and Form 10E.

I resigned from my job and my last working day was 27-Feb-2026. My notice period was 3 months, but the company relieved me early and paid me for the remaining 3 notice period as part of my Full & Final settlement.

The breakup included:

• 1 month as Resign Salary Release (Feb)
• 2 months as Notice Pay(Mar and April)

The entire amount was taxed, TDS was deducted, and it is included in my Form 16 for FY 2025-26.

Because of this, an amount equivalent to the April (FY 2026-27) notice period was also taxed in FY 2025-26, even though my employment had already ended in February.

Can I claim relief under Section 89 by filing Form 10E for this payment?

AI Summary

Section 89 relief for advance notice pay depends on Rule 21A computation and Form 10E filing.
Notice pay received in a full and final settlement may be examined for relief under Section 89 where a portion of the amount relates to a later financial year but is received and taxed earlier. Relief is available only if the payment qualifies as salary received in advance and the computation under Rule 21A shows that earlier taxation created an additional tax burden. Form 10E should be filed before filing the return, but the actual relief may still be nil if the comparison does not produce any difference in tax liability.