Tax on retention bonus
This query is : Resolved
07 December 2018
Hi All,
I was paid X amount of retention bonus which was credited to my account after deducting tax of amount Rs. 1 lakh. With this bonus, company had given condition that i need to stay with same organization for next one year. Due to certain circumstances i am going to resign and move to another organization. Now my current company will ask me to pay back entire retention bonus which i am ready to but what about the 1 L tax which was deducted ? How can i claim it back ? If there is way to claim it back what particular document i will need from my current employer ?
I was paid X amount of retention bonus which was credited to my account after deducting tax of amount Rs. 1 lakh. With this bonus, company had given condition that i need to stay with same organization for next one year. Due to certain circumstances i am going to resign and move to another organization. Now my current company will ask me to pay back entire retention bonus which i am ready to but what about the 1 L tax which was deducted ? How can i claim it back ? If there is way to claim it back what particular document i will need from my current employer ?
16 December 2018
are both transactions being done in the same financial year?
16 December 2018
then ask them to adjust everything in the Form 16 itself and only pay back the balance amount. As long as they dont show the bonus as part of your salary, any excess TDS shall be refunded to you at the time of filing of return,
16 December 2018
Ok. And by regulations, are they supposed to adjust form 16, to show bonus taken back from employee or not ?
16 December 2018
they just need to adjust the amounts shown as paid to you in TDS return. That is all. Its simple - Pay you Rs 10 and you refund me Rs 3, so I show net 7 as paid to you!
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16 December 2018
Actually in another post about similar issue you have mentioned the bonus returned cannot be adjusted in form 16. https://www.caclubindia.com/experts/what-happens-if-i-return-bonus-back-to-my-company-2090364.asp . I am confused. Please advice.
16 December 2018
yes. that is why I asked whether it is from the same year or separate years. if you see that query, the facts are different from your case as it spilled over two different financial years!
16 December 2018
oh got it. So my case is same financial year. But my only concern is my bonus i will have to pay through cheque as amount is big and FnF would not be enough. So in case repayment is made thorough in that case also they will give me revised Form 16 ?
16 December 2018
your salary for the year exceeds the repayment amount?
16 December 2018
Yes annual salary for the year exceeds repayment amount but leaveencashment and FnF would not be enough for repayment and a cheque payment would be required to be done
16 December 2018
then whats the worry. make sure that when they create F&F, they also issue you a salary statement (as form 16 will com later) and it is net of the bonus amount
16 December 2018
ok got it. I need to get statement showing the return amount. Let me try this. Thanks so much for all your assistance.
17 December 2018
you are welcome Gaurav.
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