Tax on Retention bonus given and recovered in diff FIN years

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Sudhir (Querist)
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27 June 2011 Hello Experts,
My company paid me a retention bonus in Feb 2010 and the tax was paid on it in FY 09-10. However I quit the company in May 2010 and I had to return the whole amount. This comes in FY 10-11. The company has shown the deducted amount in FFS but my total income from the company does not exclude the retention bonus amount I paid back to them. In Form 16 they do not mention anything about the retention bonus paid to them. On asking them for the clarification they said they do not do it due to auditing reasons and the employee can take help of Tax auditors to generate form 16 again to save tax on the retention amount paid back. Can anyone help me on this please? I also paid them the notice period recovery for two months.
How can I save tax on the whole amount I paid them back ?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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28 June 2011 At the time of filing of your return of income you claim this a deduction from Salary & Bonus before you arrive at the gross salary. Procure a certificate from the company that you have return the Bonus to the company. Kindly also take a letter from the company that the company has not reduced the refund of retention Bonus from the salary. Once you file the return after deduction of retention bonus you can refund of the same.

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