Dear Members,
I have a query regarding reimbursement of notice pay period deduction. If the new employer reimburses the employee the entire notice pay period amount that was deducted by his previous employer, will the reimbursed amount be taxable? Or will it be treated as reimbursement of expenses incurred (like reimbursement of any other expenses eg. tour expenses) and will not be taxable(since it is not an income for the employee and he stands to gain nothing from this transaction )?
Please also mention releveant sections of Income Tax Act as well as case laws which can be used as reference in such a scenario.
Thanking you,
Anjana
CAclubindia
