Taxability status of pl encashment

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This query is : Resolved

Ashok Kumar Sharma (Querist)

06 May 2018 Dear Sir,

I retired from PSU Bank on 31.03.2018. As per rules payment of due PL/EL is made on retirement subject to maximum of 240 days. Out of this PL encashment amount, Rs.3,00,000/- is tax free and remaining amount is taxable as per income-tax rules. The amount has been paid/credited to me in FY 18-19 but the Bank has included this amount in my income for FY 17-18 and has deducted TDS thereon. Please clarify how this amount is taxable i.e. in FY 17-18 or FY 18-19.

Thanks & Regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 May 2018 All the dues on retirement is payable on the date of retirement. As the date of retirement is on 31/03/2018 all the income consequent on retirement is the income of the FY 17-18 irrespective of the date of payment.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

07 May 2018 Taxable in FY 2017-18, even though you would have received payment subsequent financial year, if Bank is booked that Exps in FY 2017-18 necessary tds deducted.

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