TDS on bond to employee

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This discussion explores the tax implications of a company deducting Tax Deducted at Source (TDS) on a bond given to an employee, with conditions attached. If an employee leaves before the stipulated period, the tax treatment of the deducted TDS depends on whether the repayment occurs in the same financial year. If not, the salary becomes taxable, and the TDS is used when filing the Income Tax Return (ITR). The query also seeks clarity on tax recovery if no new job is taken and the amount is repaid to the company.

Lalit Nyati

Lalit Nyati (Querist)
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28 December 2021 Company give Rs.1,40,000, after deducted Rs.60,000 as TDS, to employee on condition that not to leave company in next 2 years.

What will the tax treatment of Rs.60,000 when employee leave job & give back to Rs.2,00,000 to company?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 December 2021 If Job left in same FY, the TDS is also gets reversible.
Otherwise The salary gets taxable and the TDS amount is consumed during filing of the relevant ITR.

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Lalit Nyati

Lalit Nyati (Querist)
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28 December 2021 ok, what will tax treatment in case no tax liability raise (ie. no new job join) in next year, and amount need pay to company?

How can get tax back?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 December 2021 Refer::: https://www.in.kpmg.com/taxflashnews/KPMG-Flash-News-Nandinho-Rebello-3.pdf

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 December 2021 Or ... https://www.taxcorner.co.in/2020/01/recovery-of-notice-pay-for-notice-period-is-deductible-and-not-taxable-itat.html

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Lalit Nyati

Lalit Nyati (Querist)
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28 December 2021 thank you very much sir for clarity.

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