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Income Tax on Bonus Returned to Company

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Shubham Gupta

Software Engineer

34 Points Posted on 08 September 2022

I was paid a bonus during my stint with a company with a payback clause if I leave the firm in the next 1 year.

Now, for example, let's say I was paid a bonus of INR 100 ( indicative 😀), out of which INR 33 was cut as income tax and I got INR 77 in my account.

Then I left the firm within 1 year and I was asked to pay back INR 100, so that means I lost INR 33.

While filing my returns, is it possible to claim back this INR 33, since I paid back that amount and it was not an earning for me, hence tax should not be applied on the same.

The amount in question is big, hence looking for a solution!

Replies (8)

Quick Summary

This discussion explores whether an individual can reclaim income tax paid on a bonus that had to be returned to the company due to a payback clause. The user received a bonus, paid tax on it, and then had to repay the full amount after leaving the company within a year. They are seeking to understand if the tax paid on the returned bonus can be claimed back as it was not ultimately earned income. While initial responses suggest it's not possible, there's a strong indication from other participants that solutions might exist, particularly if the bonus receipt and repayment occurred in different financial years.