Taxable income

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ankit (Querist)

25 September 2018 Dear all ,
I want to know that a person (salaried based)having taxable salaried income 1 lac per month worked from april 18 to june 18
afterthat he resigned and notice period 1 lac dedctued in his full and final
now what the taxable income is 3 lac or 3-1=2 lac please suggest me . if any case law exist than please refer me
thanks

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

25 September 2018 Taxable salary is Rs. 2lakh

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

25 September 2018 In a significant ruling, the Ahmedabad bench of Income Tax Appellate Tribunal or ITAT recently ruled that an amount deducted from an employee's salary for not serving out a notice period cannot be considered as taxable income. "...in our considered view, the actual salary received by the assessee is only taxable and therefore, we allow this ground of appeal of the assessee," the bench said last month. In other words, this means that where an employee has not served the notice period as per terms of employment and deduction has been made from his or her salary in this regard, such deduction could not be treated as income of employee and subjected to income tax. The ruling came in a case related to a person who did not serve the full notice period during his stint at two companies and his employers had deducted certain amount while paying the final salaries. In this particular case, the person had shown only net receipt as income while filing his return of income. The Income Tax Department contended that as salary was taxed on due basis, whether paid or not, and did not allow this deduction. However, the Tribunal ruled in favour of assessee.

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