Tax refund of joining bonus with non-revised Form-16

Hey Gautam, this is a common issue when employers don’t revise Form 16 after such adjustments.

Here’s what you can do to claim the tax refund on the returned joining bonus:

1. Reporting in your ITR:

• Since your employer hasn’t revised Form 16, you’ll have to manually adjust this in your Income Tax Return (ITR).

• Under “Income from Salary”, report the full joining bonus amount of ₹3,75,000 as income (as per Form 16).

• Then, under “Income from Other Sources” or as a “Deduction” under Section 16(iii) (repayment of salary), you should claim the returned bonus amount (₹3,75,000) as an expense or deduction.

2. How to show this in ITR:

• If you file ITR-1 or ITR-2:

  • In the Salary section, enter the gross salary as per Form 16 (including the joining bonus).

  • Use the section “Other Income” or “Deduction under Section 16(iii)” (where salary repayment is allowed) to reduce your taxable income by the joining bonus amount you returned.

3. Documents to keep ready:

• Copy of your offer letter showing the joining bonus.

• Payslips showing the deduction/repayment.

• Form 26AS showing the TDS deducted.

• Any communication with employer about repayment.

4. Result:

• You’ll get refund of excess tax paid on that joining bonus amount because your taxable income will be reduced by the amount repaid.

Important: The key is to claim the returned amount as a deduction under Section 16(iii) while filing your ITR. This is a valid provision for repayment of salary.