An employer terminated his contract, for which he had to pay 3 months salary as compensation to the employer. He had till then received salary for 11 month's.
Can tax benefit be available for the compensation amount?
will 11 months salary be taxable in hands the employee or 8 months salary??
Menu
Compensation by employee to employer
Replies (2)
Damages claimed for breach of contract cannot be considered income and income tax cannot be levied on such receipts, the Income-tax Appellate Tribunal, Mumbai has ruled recently. The ITAT held that such income can be considered capital receipts. In a normal case, tax is not levied on capital receipts unless the case involves transfer of assets. If there is transfer of assets, the revenue received would be considered capital gains and taxed accordingly.
You can consider net receipts
Recent Topics :
- FAI & FAST-DS 2026 query
- Is GST registration mandatory in this case
- Buying a residential flat in Goa: should my wife b
- Income tax filling
- Applicability of RCM in the case of import of serv
- Confusion in gst registration for service category
- Itc claimed from return defaulters
- Gst input credit
- CAN PARTNERSHIP FIRM SIGN SERVICE AGGREMENT WITH A
- E-waybill
Related Topics :
CAclubindia
