Treatment of Notice Pay Recovery and Notice Pay Reimbursemen

This query is : Open

Rajen Pandya (Querist)
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19 May 2011 Hi,

My previous employer had deducted some amount as Notice Pay Recovery in the Full and Final Settlement. The same amount was reimbursed by my new employer. My new employer had clarified that they will treat the reimbursed amount as over and above the salary and will consider it for taxation.

Question:
1. Is there any option available for any kind of tax benefit from this situation?
2. If yes, under which section?
3. If no, during the tax return filing for myself, can it be shown after net off of both these in order to arrive at taxable income?

Thanks.
Rajen

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 May 2011 You may show salary income as under-

From 1st Employer -

Salary Income
Less: Notice Period Salary Deducted

From 2nd Employer
Salary Income
Add: Notice Period Salary Reimbursed.

Rajen Pandya

Rajen Pandya (Querist)
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20 May 2011 Hi Paras,

Thanks for your reply. However, whether this kind of clarification is available anywhere in Indian Income Tax world? Logically I agree with what you said, but the department will ask for the authenticity of this kind of adjustment w.r.t. IT Act.

Regards,
Rajen

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Rajen Pandya

Rajen Pandya (Querist)
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23 May 2011 Hi,

Anybody is having any idea of the tax treatment as per law?

Regards,
Rajen