Section 157 - Relief when salary, etc , is paid in arrears or in advance
This provision neutralises the rate distortion caused when salary-related receipts belonging economically to several periods are taxed in one year. The claim is formula-based under Rule 73 and is made in Form 39. It does not exempt the receipt; it compares the current-year tax effect with the tax that would have arisen in the relevant earlier years.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Current law and effective date
Section 157 is controlled against the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The Act and Income-tax Rules, 2026 operate from 1 April 2026; earlier years and saved proceedings require the repeal-and-savings framework rather than automatic migration.
Primary statute: Income Tax Department consolidated Act | Rules: Notified Income-tax Rules, 2026
2-minute decode
This provision neutralises the rate distortion caused when salary-related receipts belonging economically to several periods are taxed in one year. The claim is formula-based under Rule 73 and is made in Form 39. It does not exempt the receipt; it compares the current-year tax effect with the tax that would have arisen in the relevant earlier years.
Who should use this section
Employees, pensioners and other covered recipients whose salary-related amount, gratuity or compensation is taxed in a year different from the economic earning period.
Old-law bridge
Section 89
The old-law bridge is navigational, not automatic precedent transfer. Match the 1961 Act wording, saved proceedings, current 2025 Act text and effective date before importing an older interpretation.
Finance Act 2026 / current-law note
No section-specific Finance Act, 2026 textual substitution is separately flagged for section 157; the consolidated post-Finance-Act-2026 text remains the controlling version and must be used instead of pre-1 April 2026 extracts.
Professional alert
No relief is available for an amount for which a deduction has been claimed under section 19(1), Table Sl. No. 12. Preserve year-wise salary, pension, gratuity or compensation records.
Connected Income-tax Rules, 2026 and Forms
Worked application
An employee receives ₹3 lakh of salary arrears relating to three earlier tax years. Calculate the extra tax in the receipt year, then compare it with the aggregate extra tax that would have arisen had ₹1 lakh been taxed in each relevant year. Relief is the positive difference.
Evidence / compliance checklist
- Preserve the primary agreement, certificate, account statement or transaction record that establishes the facts relevant to section 157 (Relief when salary, etc., is paid in arrears or in advance).
- Reconcile the section 157 amount to books, return schedules and third-party evidence so the computation can be reproduced without relying on a narrative assertion.
- Keep the current-law source and any prescribed Rule/Form evidence with the tax-year file for section 157; do not rely on a legacy 1961 Act form merely because the section has an old-law bridge.
- Where section 157 contains a threshold, election or time limit, retain dated evidence proving that the condition was satisfied before the return or proceeding was finalised.
Common mistake
A common section 157 error is to apply the old-law label or headline rate without rebuilding the current statutory conditions. For “Relief when salary, etc., is paid in arrears or in advance”, the safer control is to test the exact taxpayer/transaction facts, the operative tax year, every linked Rule/Form and the Finance Act 2026 consolidated wording. No relief is available for an amount for which a deduction has been claimed under section 19(1), Table Sl. No. 12. Preserve year-wise salary, pension, gratuity or compensation records.
Recommended approach
For section 157, start with the legal trigger in “Relief when salary, etc., is paid in arrears or in advance”, document the evidence for that trigger, then run the computation or procedural step against the current text. As a cross-check, verify this provision-specific checkpoint: Relief compares tax impact in the receipt year against the tax that would have arisen in the relevant earlier years.
Thresholds, periods and timing checkpoints
- Relief compares tax impact in the receipt year against the tax that would have arisen in the relevant earlier years.
- Rule 73 / Form 39 documentation is required for the prescribed claim.
Related provisions and interaction map
Section 157 interacts with the other sections 155-160, section 202 where the rebate regime is relevant, Rules 73-76 where treaty/FTC procedure applies, and the return/assessment provisions.
Current statutory text
Primary-source trail
Statute: Income-tax Act, 2025 as amended by Finance Act, 2026
Rules: Income-tax Rules, 2026
Law navigation: Income Tax Department 2025 Act / Rules hub
Quoting note: Use the official consolidated Act for verbatim legislative language.
FAQs
Does an old Income-tax Act, 1961 case automatically decide section 157?
No. The old-law bridge helps research, but transferability depends on materially matching language, transition rules and any Finance Act 2026 change.
Which text should be quoted in advice or litigation?
Quote the consolidated official statute for the relevant tax year. If this page presents a provision summary rather than complete statutory text, use the official consolidated Act for verbatim legislative language.