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Salary surrendered in lieu of notice period

16 July 2018

I took voluntary retirement from a public sector bank on 07.04.18. I surrendered three months salary in lieu of notice period on 07.04.18.

Please advise as to how the surrendered amount will be treated in current financial year 2018-19 (AY 2019-20).

TDS on surrendered amount being the salary for the months of Jan to Mar 2018 was deducted in previous FY 2017-18 .

Since its a financial loss in current financial year 2018-19 and TDS was paid on the amount in previous financial year, which was actually not accrued or surrendered subsequently. Please quote relevant instructions with section/sub section of IT Act under which the subject matter will be treated.

Nawal Kishore
email - nawal.malhotra @ gmail.com

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2 Replies

Pawan Sehrawat (Partner) (91 Points)
Replied 16 July 2018

U have to pay tax on salary surrendered.

1 Like

Nawal Kishore Malhotra (3 Points)
Replied 17 July 2018

Sir, TDS on salary earned during the period Jan 18 to Mar 18 has alredy been deducted in previous financial year 2017-18. My question is that "Am I eligible for any exemption under Income Tax Act for the amount of salary surrendered in current financial year 2018-19 in lieu of notice petiod as its a financial loss to me in current financial year 2018-19. Should the said amount be not deducted from my total earnings on account of pension and other superannuaion benefits not exempted from tax? The relevant provision/section of Income Tax Act may please be quoted. Regards