Seeking Clarification on Tax Implications for Ex-Gratia Payment Received After Layoff

karan (student) (45 Points)

10 July 2025  

Hi,
I was laid off from my job and was paid 4 months salary as ex gratia subsection under the salary section in my form 16. I was a manager in my last role and the ex-gratia amount is 17 lacs and was taxed by this employer in its entirety(not 12.5 lacs u/s 10b or 10c). This is adding substantial tax this AY, esp in year that’s been so turbulent. Can someone please help if there’s any deduction allowed? I see conflicting reads on the internet about ex-gratia taxability, with some saying its not taxable at all and some saying everything is taxable.