Tds on salary...
This query is : Resolved
21 February 2013
Dear Sir,
I have some query regarding Income Tax implication on the below said case;
If an employee signs a bond with the Co. and after a some period employee wants to resign the job. In the bond there is one condition stated that employee should reimburse the remaining period salary to the Co., whether that reimbursed salary is taxable to the Co.? and while calculating TDS on salary what is impact of that amount?
For eg. Service Period is 12 months, resignation after 9 months, so employee has to pay 3 months salary to the Co. For calculating TDS what amount of salary (how many months) is to be considered?
I have some query regarding Income Tax implication on the below said case;
If an employee signs a bond with the Co. and after a some period employee wants to resign the job. In the bond there is one condition stated that employee should reimburse the remaining period salary to the Co., whether that reimbursed salary is taxable to the Co.? and while calculating TDS on salary what is impact of that amount?
For eg. Service Period is 12 months, resignation after 9 months, so employee has to pay 3 months salary to the Co. For calculating TDS what amount of salary (how many months) is to be considered?
CA Suraj Lakhotia
(Expert)
21 February 2013
The signing of a bond with the company creates a contractual obligation on your part.
The salary you paid back to the company (notice period salary or whatever name it is called) will be taxable in hands of company as other income.
As far as you are concerned, you have earned 9 months salary and Tax will be calculated for the 9 months you have served with the company.
The refund of 3 months arises due to breach of contract and wont be adjusted against salary you have earned for income tax.
The salary you paid back to the company (notice period salary or whatever name it is called) will be taxable in hands of company as other income.
As far as you are concerned, you have earned 9 months salary and Tax will be calculated for the 9 months you have served with the company.
The refund of 3 months arises due to breach of contract and wont be adjusted against salary you have earned for income tax.
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CA Prashant Gupta
(Expert)
21 February 2013
completly agree with CA Suraj.
as no exp is allowed for salary. So 3 month salary will not be adjusted. he need to pay tax on 9 month salary
as no exp is allowed for salary. So 3 month salary will not be adjusted. he need to pay tax on 9 month salary
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