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Left company in march, salary received in april will be considered in which fy
Hi,
I left my previous organization on 29.03.2016. I received my Full and Final settlement along with March month's salary in April. My previous organization considered it as April month's salary and provided IT computation sheet which shows this income for FY2016-17.
My query is -
1. My march month's salary should fall in which FY. 2015-16 or 2016-17?
2. Other FnF settlement amount should fall in which FY. 2015-16 or 2016-17?
Thanks
Replies (1)
As per Income Tax Act, salary is taxable on receipt or due basis whichever is earlier. Therefore, if your salary has been taxed on due basis by your previous employer then it shall be considered as income of that year in which it is taxed on due basis, however, if the same have been taxed on receipt basis then it will be considered as income of the year in which it is received.
In your case, since employer has taxed it in April 2016 i.e. year of receipt, then it should be considered as income of FY 2016-17.
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