Retension Bonus - Refunded - will TAX be returned by Govt.?

ITR 938 views 2 replies

Hi All,

 

My company wants to pay me a rentenion bonus of 1.4 Lakhs (it's advance pay, not at the end), the conditions is I should stay back for next one year from the date they pay it (that's until Dec 2011).I understand it's a taxable amount (30% or so) and I'll receive approximately 1 Lakh when I accept the offer.


The question here is - Suppose I want to leave the company before next December (lock period). As per the condition in the letter I need to re-pay the full amount (that's 1.4L) to the company. What will happen to the tax paid? I understand the comany will not take care about that part - will I be able to file this under IT returns in next financial year and reveive the amount from Income tax dept.? If yes, will I get the full amount and by when that credit to me? Kindly advice.

 

Best Regards,

-Vishal

Replies (2)

Hi Vishal

As you have a vested right in the retention bonus, you have to pay tax in the year of receipt of the bonus itself. 

You can not avoid the tax liability of the bonus till the contingency occurs.

Thanks

if u leave the job and paid the 1.4L , its your expenditure only, you cant claim refund of tax.


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