SALARIES

Save Share

This query is : Resolved

Quick Summary

This discussion clarifies the tax implications of compensation pay received under a Voluntary Retirement Scheme (VRS) due to factory closure. The compensation is considered a 'profit in lieu of salary' under Section 17(3) and is therefore liable for income tax. However, individuals may be eligible for tax relief under Section 89.

S. RAVICHANDRAN

S. RAVICHANDRAN (Querist)

08 April 2020 ONE OF MY FRIEND RECEIVED COMPENSATION PAY FOR VRS DUE THE CLOSE DOWN THE FACTORY DURING THE MONTH OF JAN.2020. PLEASE LET ME KNOW THE COMPENSATION PAY LIABLE FOR INCOME TAX OR EXEMPTED FROM IT FOR THE FY 2019-20 (AY 2020-21)

PLEASE CLARIFY

REGARDS
S. RAVICHANDRAN

CA SANKET GARG

CA SANKET GARG (Expert)

08 April 2020 It will be liable for income tax

CA Suresh Jain

CA Suresh Jain (Expert)

10 April 2020 The assessee shall be eligible for relief u/s. 89

S. RAVICHANDRAN

S. RAVICHANDRAN (Querist)

10 April 2020 NO ARREARS SALARY RECEIVED. COMPENSATION SALARY FOR UNDER VRS DUE TO THE COMPANY CLOSURE

CA Suresh Jain

CA Suresh Jain (Expert)

13 April 2020 Please read section 89 with section 17(3). The Compensation received in connection with termination of service is a "profit in lieu of salary" as per section 17(3) eligible for rebate u/s. 89

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now