Retrenchment Compensation
NANDISHA H (38 Points)
24 August 2018The Employee compensation received from company at the time retrenchment
The income tax or Exemption in the hands of Employee.
In case exemption limit.
NANDISHA H (38 Points)
24 August 2018
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(166727 Points)
Replied 24 August 2018
Any compensation received by a workman under the Industrial Disputes Act, 1947 or under any other Act or rules, orders or notifications issued thereunder or under any standing orders or under any award, contract of service or otherwise, at the time of his retrenchment. The amount is exempt under this clause to the extent of least of the following limits:
Section 25F(b) of Industrial Disputes Act provides for payment of retrenchment compensation equivalent to 15 days average pay for every completed year of continuous service or any part thereof in excess of six months. For this purpose, average pay will be calculated as under:
1. if the workman is getting monthly salary, then on the basis of the salary of last three calendar months; or
2. if the workman is getting weekly wages, then on the basis of wages of last four completed weeks; or
3. the workman is getting daily wages, then on the basis of wages of last twelve full working days.
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