Wednesday, 2 May 2012

Termination compensation received is exempt from income tax

Most of the employees receive compensation in connection with termination of employment and there is a circumstance under which such compensation is exempt from income tax. Retrenchment compensation received by workers under Industrial Disputes Act or any other similar laws, rules, order etc. is exempt from tax to the extent that the payment does not exceed the amount payable under the Act, that is, @ 15 days wages for every completed year of continuous service subject to maximum as may be prescribed. The Central Government, in pursuance of the power conferred on it, has enhanced the maximum limit to Rs. 5,00,000/- where retrenchment is on or after 1.01.1977

1 comment:

Anonymous said...

What's up friends, fastidious piece of writing and good urging commented here, I am genuinely enjoying by these.
My website - whiplash

5 GST Judgments in 2026 Every Business Should Be Watching

The year 2026 has already delivered several landmark GST decisions that could significantly influence tax compliance, assessments, and litig...