Tax computation at the time of Final settlement of Employee

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

13 April 2010
An employee has worked from 01.04.2009 to 31.12.2009. His final settlement is processed now. He is requesting for considering his actual income till 31.12.2009 as the income for the year, as he hasn't been on job after december.

As per I.T act we were compputing his estimated income for 12 months and estimated tax liablity for 12 months, and then finding tax liablity for 9 months.

The tax slab rate and tax liablity will be different (lower side) if we accept his request. Can we accept that , if he is providing a declaration that he has not earned after december'2009?

Querist : Anonymous

Querist : Anonymous (Querist)

13 April 2010 amit_virgo36@yahoo.com

Anil Kumar Meena

Anil Kumar Meena (Expert)
Follow

13 April 2010 the question is not clear

Upgrade to CAclubindia Pro. Subscribe Now!

kartik_somu

kartik_somu (Expert)
Follow

13 April 2010 for TDS, consider only the income for the period of service. you don't need to consider the service after he his relieved.

K V Subba Rao

K V Subba Rao (Expert)
Follow

13 April 2010 I support the view expressed by Sri Karthik

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
Follow

14 April 2010 PLEASE ASK HIM FOR A DECLARATION IN FORM 12B AND THEN YOU CAN PROCEED ACCORDINGLY.

Querist : Anonymous

Querist : Anonymous (Querist)

25 April 2010 An employee has worked for the period 1/04/2009 to 31/05/2009 and has total earning (salary earning) of Rs. 1.5 lacs(Rs.75000/- p.m). On 01/06/2009 he submits his resignation.

what will be his tax liablity when final settlement is processed on 01/06/2009?

will it be nil as his income is less than minimum taxable income of Rs.1.6 Lacs.

What if an employee joins another organzation and takes the benefit of taxable income slab (i.e upto 1.6 lacs) again ?