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Tax Query for FY 2024-25

Tax queries 696 views 2 replies

Person A was working as a Medical Representative. In December 2024 he was laid off. He received a severance pay. The company added the entire severance pay to the salary part and deducted TDS on the entire amount. The severance letter only mentions the fact that the position has become redundant. Can he claim some exemption u/s 10(10B)/10(10C)?


Replies (2)

Yes, Person A may be able to claim exemption on severance pay, but the eligibility depends on the nature of the payment and the specific section under the Income Tax Act it falls under.

It is severance pay and mentioned as severance pay. Points to keep in mind:

  1. Cannot claim as capital receipt because of 17(3) and 56(2)(xi). But wanted to understand whether "Ashok Raghunathrao Kulkarni, ... vs Income Tax Officer, Circle 1" does have any bearing on it because the facts are similar
  2. Can a Medical Representative qualify as a "workman" as required u/s 10(10B)?
  3. For 10(10C) neither any specific VRS scheme has been created, nor any approval has been taken from IT Dept.

So how to go about it?


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