Notice pay deduction from Form 16

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Ganesh (Querist)
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17 February 2009 My previous employer deducted notice pay and the same was not deducted from total salary mentioned in Form 16. My current employer is not reimbursing it. Whether is there any way to claim a refund?

The amount deducted is my expense and it is an income for the employer. It should be taxed in the hands of the employer. Now it is double taxing for the same amount.

Regards
Ganesh

MAYUR JOSHI

MAYUR JOSHI (Expert)
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17 February 2009 If your employer has deducted Notice Pay then how can he mention the same in Form 16.
You should talk with your employer and explain the status. If you have not received Notice pay amount and in future it is also not receivale to you then i am of the opinion that It should not be treated your income.

Ganesh

Ganesh (Querist)
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17 February 2009 Thanks for the reply.

Notice pay is considered as penalty for short notice and it is deducted by the employer from employee settlement check.

My previous employer is not agreed to reduce the deducted amount from Form 16. Now i need to pay tax for that amount which is not earned.

My previous employer will give hard copy of the settlement details and using that whether i could do any refund appeal with income tax dept? If so then what is the procedure?

What is the next step i shoud take?

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CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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18 February 2009 You should file the Income Tax Return not taking that amount into your salary income.

Ganesh

Ganesh (Querist)
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20 February 2009 Thanks for the reply.

One last question:
While filling tax return, I could deduct the amount and recalculate the income and refund details and attach the required proof with that. OR I could get help of an auditor and submit returns through him.

My question is whetehr i could recalculate and submit the tax return or get help from auditor?

Regards
Ganesh

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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04 August 2024 When dealing with a tax return that includes significant issues such as demands, discrepancies, or errors, you generally have two main approaches to resolve it: recalculating and submitting the return yourself or getting professional help from an auditor or tax consultant. Here’s a detailed comparison to help you decide which approach might be better for your situation:

### 1. **Recalculate and Submit the Return Yourself**

**Pros:**
- **Cost Savings**: You can avoid professional fees by handling the recalculations and submissions yourself.
- **Direct Control**: You maintain direct control over the details of your return and how issues are resolved.

**Cons:**
- **Complexity**: Recalculating taxes and resolving discrepancies can be complex, especially if you are unfamiliar with tax laws and calculations.
- **Risk of Errors**: There is a higher risk of errors or omissions if you are not well-versed in tax regulations and procedures.
- **Limited Support**: You may not have access to detailed guidance or interpretation of tax laws that a professional could provide.

**Steps to Follow:**
1. **Review the Notice**: Understand the discrepancies or issues mentioned in the notice.
2. **Recalculate Your Income**: Adjust the figures based on the required changes or corrections.
3. **Prepare Supporting Documents**: Gather and attach all necessary documents and proofs that support your recalculated return.
4. **Submit the Revised Return**: File the revised tax return through the appropriate channels, ensuring that all required information is accurately provided.

### 2. **Get Help from an Auditor or Tax Consultant**

**Pros:**
- **Expertise**: Auditors and tax consultants are experienced in handling complex tax issues and can provide professional guidance.
- **Accuracy**: They can help ensure that the recalculations and submissions are accurate, minimizing the risk of errors.
- **Comprehensive Support**: Professionals can offer detailed explanations, handle communications with tax authorities, and ensure compliance with tax regulations.
- **Peace of Mind**: You can have confidence that the return is handled correctly and all issues are properly addressed.

**Cons:**
- **Cost**: Hiring an auditor or tax consultant involves professional fees, which might be a consideration depending on your budget.
- **Dependence**: You will need to rely on their schedule and availability.

**Steps to Follow:**
1. **Consult a Professional**: Reach out to a certified auditor or tax consultant.
2. **Provide Information**: Share all relevant documents and details related to the issues and discrepancies.
3. **Review and Approve**: Review the recalculated figures and proposed submissions.
4. **Professional Submission**: Let the professional handle the submission of the revised return and any necessary communications with the tax authorities.

### Summary

- **If you are confident** in handling tax calculations and have a good understanding of tax laws, you might opt to recalculate and submit the return yourself. Ensure you meticulously review and document everything to support your recalculations.

- **If you are unsure** about the complexities of the tax issues or prefer professional assurance, it is advisable to seek help from an auditor or tax consultant. They can provide expert guidance, reduce the risk of errors, and handle the intricacies of the tax return process.

In many cases, especially with complex issues or significant discrepancies, getting professional assistance can save time, reduce stress, and ensure compliance.