Retrenchment Allowanace

799 views
User Avatar

Service
120 Points Posted on 09 February 2009

Hi

I have a query on the tax liability on retrenchment allowance received.  A company was closing its Delhi operation and given a choice to entire employee either to relocate to some other units situated in India or can leave the orginsation in which 2 months salary would be given as compensation. Can the said compensation received be treated as Retrenchment allowance u/s 10B for tax exemption or can this compensation received be treated as tax exempted in any section of the IT Act?

Please clarify

Thanks & Regards

Ramesh

 

Reply Share Follow Topic
On 09 February 2009 at 18:03 Report
Replies (1)
User Avatar

CHARTERED ACCOUNTANT
350 Points Posted on 09 February 2009

Yes, it is exempt u/s.10 (10B) to the extent of least of the following:

1) Amount calculated u/s.25F (b) of the Industrial Dispute Act or

2) Such amount as notified by the Central Government. (At present, it is Rs. 500000/- if a worker is retrenched after 31-12-1996).

Non-exempt portion is taxable u/s.17 (3) as Profit in lieu of salary under the head “Income from Salary”. Of course, it is subject to relief u/s.89.

Reply
On 09 February 2009 at 18:33

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Topics :

  1. FAST DS 2026 MAIL QUERY
  2. Does Anyone need CA Foundation books of May2026 at
  3. Last day for ITR-U for AY 2023-2024 (FY 2022-2023)
  4. Sale of shares in indian company by a non resident
  5. Difference in TIS
  6. GSTR-9C Upload Status Error Occured
  7. “Income Tax Implications of Company-Related
  8. Advice needed: Hypothetical case of non-filing of
  9. Demand Raised for Cess Amount Despite Section 89 R
  10. WRONG BILL NO FILED IN GST R1

More recent discussions | Post

Related Topics :

Loading

Latest Job Openings

View all
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
12 October 2026
Chartered Accountant - Internal Audit

HKC | Chartered Accountants & Business Advisors

Ludhiana

CA

View Details
Company
Featured ARTICLESHIP 28 October 2026
CA- Inter and Articles

N N V Satish & Co.,

Hyderabad

CA Inter

View Details
Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
24 October 2026
CA Industrial Trainee

Fytomax Nutrition Private Limited

Aurangabad

CA Inter

View Details
Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details
Company
19 October 2026
Accountant

Jari Saree Center

New Delhi

Others

View Details