I got a severance package in Feb 2019. I have read through many posts. I know that the budget has brought severance package under tax ..I do not know if it's effective April 1 2019 or 1 April 2018...the law says effective 1 April 2019 but at the same time says AY 2019-20..any guidance will be helpful.
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Severance pay in feb 2019
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You are correct ...
Read sec. 28(ii) of IT act....
The following income shall be chargeable to income-tax under the head "Profits and gains of business or profession" .....
(ii) any compensation or other payment due to or received by ......
.......
(e) any person, by whatever name called, at or in connection with the termination or the modification of the terms and conditions, of any contract relating to his business;
Inserted by the Finance Act, 2018, (w.e.f. 1-4-2019)
It is applicable for assessment from 1-4-2019 ...... i.e from AY 2019-20 .....
relevant to FY 2018-19 onwards......
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