HOW TO CLAIM RELIEF WHEN SALARY IS PAID IN ARREARS OR IN ADVANCE
Whereby any portion of assessee’s salary is received in arrears or in advance or because of his having received in any one financial year salary for more than 12 months or payment which under the provisions of section 17(3) is a profit instead of salary, he is hence taxed at a higher slab then that at which it would otherwise have been assessed. The Assessing The officer shall, on an Application made to him, grant such relief as prescribed. The Procedure for computing the relief is given in Rule 21.  This relief is provided in the financial year in which such arrears have been received.
 The Procedure to calculate the amount of relief when salary is paid in arrears or in advance:-
STEP 1
First of all, calculate the tax payable of the previous year in which the arrears /advance salary is received on
1.Total Income inclusive of Additional Salary
  1. Total Income exclusive of Additional Salary
The Difference between 1 & 2 is the tax on additional salary Included in total Income.
STEP 2
Now calculate the tax payable of every previous year to which the additional salary relates to
  1. 3.The total Income including Additional Salary
    The Total Income excluding Additional Salary
Calculate the difference between 4 & 5 for every previous year to which the additional salary relates & aggregates them.
STEP 3
The Admissible Relief shall be the Excess between the tax on Additional salary as calculated under STEP 1 & STEP 2.
No relief if:
·                                 There is no excess between the tax calculated on Additional Salary (Step 1 & Step 2)
·                                 In respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service per any the scheme, the assessee has claimed exemption u/s 10(10C) in respect of such the compensation received on voluntary retirement in the same assessment year or any other assessment year.
 WHERE AND HOW TO FURNISH INFORMATION FOR CLAIMING RELIEF
In the case where the assessee entitled to relief is a government servant or an employee in a company, co-operative society, local authority, university, association, institution, he
may furnish the particulars to his employer who is responsible for making the payment referred to in section 192(1) in specified form 10E.
In In the case of other employees, the application for relief shall have to be made to the Assessing Officer instead of the Employer.