student
58 Points
Joined May 2010
mr murli
ur asking Payment made by employee to the employer towards short notice period
Tax treatment in the hands of employee
nothing is chargeble to tax b'coz it is a payment and not any income.
but insted of paying in cash employee adjusts his leaves viz CL/ PL towards short notic pay than leaves forgoteen will not becom taxfree and they will chargable to tax at the time of encashment/leaving the job.
Tax treatment in the hands of employer
amount received by employer from employee towards short notice period will be chargable to tax as his business income.
for further assistance feel free to contect.