Taxabilty of compensation received - its urgent....

a person has recived compensation from employer amounting to rs. 186000 under the industrial dispute act in the f.y. 2012-13 and he retired in the february,2011. it comes under the section 33 C(2) of the ID act, 1947 as given in the notice.

 

is the compensation received under section 33 C(2) of the industrial disputes act, 1947 exempt under the income tax act.......??

Replies (5)

It will form part of salary - taxable.

But wait for others to reply.

for this u need to check compensation paid is for salary or other emoluments like pf, insurance etc.

 

if it is for salary than it is taxable and if it is for others than it should be exempt income.

actually, the case is like this......

workers claimed for compensation u/s 33c(2) of id act 1947 for working on Saturdays. they worked 6 days a week.

 

However, Govt. had already issued orders declaring saturday as holiday. so they filed an appeal in the court under id act, 1947 claiming for compensation. the case was decided in favour of workers and compensation was awarded to them.

while crediting the compensation amount in the accounts of employees, employer deducted TDS and it was told to employees that TDS has been deducteed mistakenly and they can ask for refund by filing return.

 

employer issued form no. 16, mentioning only salary income of rs.163876 and showed TDS deducted on compensation as REFUND.

now 26-AS shows the amount of compensation credited to the account of employee and TDS deducted thereon. How should i show this amount in ITR and if it is exmept under which section..??

Sounds like an overtime pay to me. I think it is part of salary and taxable. And I guess TDS is deducted from salary on a regular basis. Check the TDS section, whether it is 92B - because 92B is TDS deduction for salary.

agreed with mihir, if 26AS shows TDS deducted on salary..it will form part of salary..

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