Company want to give Rs.15Lac advance retention money for 15year retention of employee. What will be the tax treatment in the hands of employee. And in which year company can claim deduction as per income tax act??
02 July 2023
It is usual practice to declare it as salary payment to employee in the year of payment, and as such it is claimed as deduction under salary payments in the same year.
03 July 2023
But Sir, Why Company should not claim this amount over the period of time of 15years. Because company following accrual basis accounting and also matching concept says we should book expenses related to income. and we will enjoy income related to this in next 15years.
03 July 2023
In that case you will have to divide salary expenditure proportionately. It will be something like Bonus. You should make contract with employee in that manner.
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