Amount refunded as exgratia

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Querist : Anonymous

Querist : Anonymous (Querist)

04 August 2015 I have a doubt regarding the amount refunded as exgratia .A candidate selected in a banking job and the employer granted a loan of Rs.1.5lacs initially to complete M.B.A and an amount of Rs.5000 p.m was deducted from his salary as loan repayment. Initially there was an agreement between E'er and e'ee as after the completion of 3 years bond period the amount deducted from salary will be refunded to the employee.Employer repaid the amount by deducting T.D.S of Rs.15,000 .E'er showed the amount refunded to the e'ee as Exgratia in Form -16B. Is the amount received as Exgratia is Taxable or not.

Amol S Joglekar

Amol S Joglekar (Expert)

04 August 2015 It is very much taxable. Assuming the candidate is still in service at the time of receiving the said so called ex gratia amount, should be deemed to be salary income and accordingly the slab rate shall be applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2015 in form 16 B the employer is showing the concession on interest rate as value of perquisite and the employee is claiming deduction u/s80 E.I want to know whether the amount refunded as exgratia is taxable even the concessional interest is showed as value of perquisite.

Amol S Joglekar

Amol S Joglekar (Expert)

05 August 2015 there are 2 parts to your query.
01. Principal repayment. : It is taxable as the same has been waived/ refunded by the employer.

02.The interest charged at concessional rate will constitute the perquisites.

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