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Taxabilty of compensation received - its urgent....

CA and CMA Ravinder Singh (CA and CMA) (853 Points)

15 July 2013

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.......??

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5 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 15 July 2013

It will form part of salary - taxable.

But wait for others to reply.

JAINENDRA JAIN (ACS/CA) (1668 Points)
Replied 15 July 2013

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.

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CA and CMA Ravinder Singh (CA and CMA) (853 Points)
Replied 15 July 2013

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..??

Mihir (Wealth Manager) (5293 Points)
Replied 16 July 2013

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.

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