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Shift Allowance and Recovery of Bonus

2408 views 2 replies

Hemant

AM - IA/SOX

78 Points Posted on 11 January 2011

Dear Collegues,

I am having following two componets in my Salary Package.

a) Shift Allowance

b) Recovery Of Bonus

In above a, is there any provision which can be allow me to take exemption while calculating taxable income. Secondly, Due to switch over of job, my previuous organisation has recovered bonus paid to me while doing full and final settlement. Does this recovery is allowed as deduction while calculating taxable salary???? My Current employer has not reimburs bonus recovery to me.

Please share your view.

Thanks
Hemant

Replies (2)

CA Karan Kapoor

unemployed

31 Points Posted on 11 January 2011

A)Shifting Allowance is fully taxable under the head Salary, that is no exemption is available

B) Recovery Of Bonous- No deduction is usually allowed under the head Salary but in your case the same would not amount to deduction because the bonous paid to you has been taxed earleir but the same is now being recovered , see it as if your salary would have Rs100 w/o deduction of rs30, but now your salary is not Rs.100 but is Rs70 only, thus only the portion you receive shall be taxed in your hands.