Taxation of global relocation allowance
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 June 2017
Hello,
I relocated to the US from India in Dec 2016 and my employer paid relocation allowance for the same. To offset the tax impact in US, they grossed up the relocation amount. As a part of relocation assistance, they also assigned a tax consultant.
The tax consultant failed to explicitly inform about the fact that relocation money would be counted as salary and would be taxable in India. So now it has come to me as a surprise that I'm supposed to pay a hefty tax on the grossed up relocation amount, which could've been very easily avoided either by postponing the move by 15 days OR postponing the deposit of relocation funds by same duration.
On top of that, they failed to anticipate that the situation would warrant paying advance tax and now I'm supposed to pay 10% penalty + interest under section 234a/b/c.
I'm wondering what are my options here. Any way to mitigate this tax impact? Should I seek compensation from the tax consultant?
I relocated to the US from India in Dec 2016 and my employer paid relocation allowance for the same. To offset the tax impact in US, they grossed up the relocation amount. As a part of relocation assistance, they also assigned a tax consultant.
The tax consultant failed to explicitly inform about the fact that relocation money would be counted as salary and would be taxable in India. So now it has come to me as a surprise that I'm supposed to pay a hefty tax on the grossed up relocation amount, which could've been very easily avoided either by postponing the move by 15 days OR postponing the deposit of relocation funds by same duration.
On top of that, they failed to anticipate that the situation would warrant paying advance tax and now I'm supposed to pay 10% penalty + interest under section 234a/b/c.
I'm wondering what are my options here. Any way to mitigate this tax impact? Should I seek compensation from the tax consultant?
Amol S Joglekar
(Expert)
29 June 2017
you can try for section 264 for dropping penalty
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