Full and final settlement for a master list employee of vpt

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 October 2011 DEAR SIR
ONE OF MY CLIENT GET A QUERY THAT HE RECEIVED Rs.400000 AS FULL AND FINAL SETTLEMT CHEQUE FROM VISAKHAPATNAM PORT TRUST. THE VPT PERSONS DID'T GAVE ANY LEDGER COPY OR ANY THING ONLY GIVEN BY CHEQUE.
NOW THE QUESTION IS THAT AMOUNT IS TAXABLE OR NOT.

Gupta Mohit

Gupta Mohit (Expert)
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05 October 2011 since the individual get the F&F and the amount is exceeding the basis taxable limit, so the co. has already deducted the tax at source in it. you can confirm the same from the finance department or the HR department. the concern organisation shall provide the form 16 at the year end

Querist : Anonymous

Querist : Anonymous (Querist)

07 October 2011 thank you for your quick reply, thank you very much, but in this query( my client) is not an employee of visakhapatnam port trust, he is a MASTER LIST CARD HOLDER.THAT MEANS deceased person or medically retired emplyoees son's haivng this card to get job in future. the vpt canceling that cards and giving that amount. even hr or any other persons are not telling the information that the amount is taxable or not , that is the problem,

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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25 July 2024 In the scenario described, where your client (a master list card holder, not an employee) received Rs. 4,00,000 as a full and final settlement from Visakhapatnam Port Trust (VPT), the taxability of this amount depends on several factors:

1. **Nature of Payment:** The taxability of the payment depends on the nature of the amount received. Full and final settlement amounts are typically paid to settle any outstanding dues or claims. It could include compensation for termination, retirement benefits, or any other contractual obligations.

2. **Taxability Under Income Tax Act:** According to the Income Tax Act, any amount received by an individual is generally taxable unless specifically exempted. Exemptions may apply based on the nature of the payment and provisions under the Act.

3. **Exemption for Compensation:** Compensation received on account of voluntary retirement or termination can qualify for exemptions under specific sections of the Income Tax Act, provided certain conditions are met. However, since your client is not an employee but a master list card holder, different rules may apply.

4. **Consultation with Tax Advisor:** Given the complexity of tax laws and exemptions, it is advisable for your client to consult with a qualified tax advisor or chartered accountant. They can review the specifics of the payment, understand the exact nature of the settlement, and provide guidance on whether any exemptions are applicable.

5. **Documentation and Clarification:** Since VPT has not provided any ledger copy or detailed information, your client should request a detailed breakup of the payment from VPT. This breakdown can help clarify the nature of the payment and determine its taxability.

6. **Reporting and Compliance:** If the amount is determined to be taxable, your client must ensure proper reporting and compliance with tax laws to avoid any penalties or interest for non-compliance.

In conclusion, the taxability of the Rs. 4,00,000 payment received by your client from VPT hinges on the specific details and nature of the settlement. Consulting with a tax professional will provide clarity and ensure compliance with applicable tax regulations.