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Others 1248 views 12 replies

dear esteemed members,

My query is related to income tax. there is a dispute between two parties. they come to a settlement for a specific amount. what tax is deducted if the disputed amount is paid under the terms of dispute settlement. and what provisions of IT act are applicable.

Thanking in advance

arvind

Replies (12)

It will depend on nature of this dispute? Little elaboration.

the dispute is like this... the employee claimed some employee benfit from the employer. the  employer refused. the employee sent  alegal notice, in counter, the employer claimed some amount from the employee on account of damage done to company property. now both settled for an particular sum. so what will be the tax if the employer pays this sum to th empoyee.the employment has been terminated before this settlement

It will be an expense for the employer, and income for the employee.

The employer cannot deduct tax on this.

Just adjust the damages to the company property recovered from the employee.

Wait for other's reply

AGREED WITH ABOVE                 

means that NO TDS is to be deducte. what about the I T liability of the employee

for the above relies, what provisions of income tax should be referred to substantiate the replies

Donot forget Insurance factor in this matter..........

If benefit which employee claimed/ received as settlement falled under excempt income then t tds will not applicable. Please confirem which benefite he claimed.

TDS is not applicable becouse it is benefit for employee.
 

ur q is not clear

Originally posted by : arvind kumar ray

the dispute is like this... the employee claimed some employee benfit from the employer. the  employer refused. the employee sent  alegal notice, in counter, the employer claimed some amount from the employee on account of damage done to company property. now both settled for an particular sum. so what will be the tax if the employer pays this sum to th empoyee.the employment has been terminated before this settlement

employment benefits has its own set of rules for incometax and may be tax free or taxable as per rules, but your query did not reflected that if employee and employer both has claimed then who is payee and who is receipent?

nature of employment benefits are required to view the exemption , if available

Originally posted by : aditya(ca learner)

AGREED WITH ABOVE                 


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