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Compensation of loss of employment

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(Querist)
01 March 2015 I was working in Arvind Mill (Arvind Ltd)
now the mill has been closed the employer paid me gratuity & Compensation. But there was deduction as tax of Rs.28880/- against Compensation Amt of Rs.403724/- I want to know that compensation of loss of employment is taxable or Tax free ?
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
01 March 2015 Compensation received in excess of 15 days wages for every completed year of service is taxable. However relief u/s 89(1) can be claimed.

Inference is from Section 10(10B)of the Income tax Act,1961 and section 25F(b) of Industrial Disputes Act,1947.
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