Assessment of my father who was a GOVT. EMPLOYEE resigned from his job in Aug 2007 as a consequence of these leave salary standing credit of the employee is not payable as per rules of the company. It had been claimed as Liquidated Damage and the same has been disallowed by dept.
The amount of leave salary is Rs.525967 and the demand notice issued under Sec.156 after making ass. under Sec 143 (3) for AY 2008-09 is of Rs.218471.
Sir can we claim the above loss of leave salary of Rs.525967 so that the tax liability may be saved..
Returned Income 697100 Add:- Dis allowance on account of liquidated damages. 525967
Income assessed 1223067 Tax on assessed income 315920 Surcharge 31592 EC 10425 Tax & Int.234 D 15607 Int.244 A 7801
Total tax and Int. 381345 less Taxes paid 162874 Net Payable 218471
01 January 2011
If leave salary is not payable to the employee as per Govt Company's Rules then how the amount of 525967/- i.e. Liquidated damage, has been received/arrived.
It's not clear from the query. Please elaborate Returned Income and the ground on which addition is being made more particularly.
However, salary is taxable on due basis and in my opinion if any amount which has not become due can not be added to Salary. From your question it seems that addition is being made even though the leave salary amount has not been received.
CAclubindia
