Retrenchment Compensation
As per sec 10(10B) of the Income-tax Act, 1961, any retrenchment compensation received by a workman as defined in the Industrial Disputes Act is exempt from tax subject to maximum compensation of Rs.5 lakh.
As per the Industrial Disputes Act workman can be defined as any person (including an apprentice employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person-
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding six thousand five hundred rupees or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, function mainly of a managerial nature.
In your case assuming the compensation received is less than Rs5 lakh and you fall within the definition of workman narrated above the retrenchment compensation received by you shall be exempt from tax.
Also if you have already filed the return for that previous year, the same can be revised and refund can be claimed provided the revision is done before the expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier. For eg: Return of A.Y 2016-17 can be revised till 31st March 2018 or before the completion of the assessment whichever is earlier.