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Taxability of Severance Pay

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(Querist)
28 December 2020 Hi,

Please let me know if gratuity,leave encashment on termination, severance pay is taxable for the FY 2019-2020.
Employer has taxed and deducted TDS.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
28 December 2020 As per sec 10(10B) of the Income-tax Act, 1961, any retrenchment compensation received by a workman as defined in the Industrial Disputes Act is exempt from tax subject to maximum compensation of Rs5 lakh.
Leave encashment up to 3 lacs is exempt. Gratuity is exempt if paid as per gratuity act provisions.
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Aashok Kumar Sharma online

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Aashok Kumar Sharma online (Expert)
28 December 2020 Agrre with CA R SEETHARAMAN
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