Compensation granted to employees
This query is : Resolved
19 January 2016
Hello Experts,
My query is that due to recent floods in Chennai, The employees of company have suffered a huge loss. To help them to reduce their burden of loss the company wishes to give them one time financial assistance in such a manner that it becomes an allowable expense in the hands of company and the employees also do not have to pay tax on that component. As an employer we want to make sure that company doesnt have to deduct TDS in a statutory correct manner.Thus how this can be achieved?
My query is that due to recent floods in Chennai, The employees of company have suffered a huge loss. To help them to reduce their burden of loss the company wishes to give them one time financial assistance in such a manner that it becomes an allowable expense in the hands of company and the employees also do not have to pay tax on that component. As an employer we want to make sure that company doesnt have to deduct TDS in a statutory correct manner.Thus how this can be achieved?
19 January 2016
It can be an allowable expense in the hands of the company as payment to employees but the company is liable for TDS on such payments.
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19 January 2016
But what is the way out if company doesnt want to deduct TDS as in that case it will not be a real benefit to the employee?
19 January 2016
To that extent of TDS increase the compensation.
20 January 2016
Exgratia also taxable.
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