Radhesh Bhoot (Aspiring CA) (229 Points)
11 December 2010
A Employee has left the company in the first month of the notice period (total notice period - 3 Months) and paid compensation to the company for two months salary.
I would like to know about the accounting and taxation effect on Employee (including for Form 16A) and also on the company.
I meant can the employee claim the salary paid to the company as deduction under any section of IT Act?
CA Tarkeshwar
(job)
(77 Points)
Replied 13 December 2010
no, he can not claim any deduction under the income tax
CA Tarkeshwar
(job)
(77 Points)
Replied 13 December 2010
no, he can not claim any deduction under the income tax
Radhesh Bhoot
(Aspiring CA)
(229 Points)
Replied 16 December 2010
Thanks and any more views are invited.....
NARAYAN
(Ca final)
(40 Points)
Replied 17 December 2010
Hi,
This is my Opinion and please correct me if i am wrong
When an employee gives salary it comes to forgoing of salary so it is taxable as per provision but if the same is surrender of salary then it is an application of an income so it allowed as deduction
Regards
Narayan
Hemant
(AM - IA/SOX)
(78 Points)
Replied 17 December 2010
Hi
There is two sitituation:
First: If employee resigns from the duties and need to pay notice period then such salary is still be taxable for employee and no deduction is allowed.
Second: If employee is send on Secondment by an employer and by virtue of agreement of secondment employee has to give back earning for specified period then that can be calim as deduction or negative salary.
Thanks
Hemant
M .K. Jha
(CA Final)
(484 Points)
Replied 17 December 2010
| Originally posted by : tarkeshwar | ||
 |
no, he can not claim any deduction under the income tax |
 |
It should be taxable unnder the head of salary of employee... cause forgone of salary is taxable..
It is not a surrender of salary..
Deduction can't be available to any one..
Lesha
( CA & CS Final Student)
(26 Points)
Replied 21 February 2011
CAclubindia
