Hi Guys,
I wanted to seek your advice on the taxation of Severance package in India. I work for an American MNC and as a part of transition to Managed Services, company is offering a severance package to employees who are impacted; where a flat 30% is deducted from the Severance Pay as tax.
As this involves a loss of employment to employees; I just wanted to understand, is their a way to recover the 30% tax deducted amount from the Income tax department ?
Any suggestions in this matter would be greatly appreciated. Also, if there are any individuals/agencies who can help us with this process, please share the contact details to have further discussion.
Regards,
Prashanth
I wanted to seek your advice on the taxation of Severance package in India. I work for an American MNC and as a part of transition to Managed Services, company is offering a severance package to employees who are impacted; where a flat 30% is deducted from the Severance Pay as tax.
As this involves a loss of employment to employees; I just wanted to understand, is their a way to recover the 30% tax deducted amount from the Income tax department ?
Any suggestions in this matter would be greatly appreciated. Also, if there are any individuals/agencies who can help us with this process, please share the contact details to have further discussion.
Regards,
Prashanth
NO.Its a capital..recpeit and hence not taxable
Supreme Court in Kettlewell Bullen and Co. Ltd. (supra) and Oberoi Hotel Pvt. Ltd. v. CIT [1999] 236 ITR 903 (SC), observed
"if the receipt represents compensation for the loss of a source of income, it would be capital and it matters little that the assessee continues to be in receipt of income from its other similar operations."....There are plethora of decisions to this effect like CIT vs. Sharda Sinha(2015)DelhiHC
From India, Jamshedpur
8Supreme Court in Kettlewell Bullen and Co. Ltd. (supra) and Oberoi Hotel Pvt. Ltd. v. CIT [1999] 236 ITR 903 (SC), observed
"if the receipt represents compensation for the loss of a source of income, it would be capital and it matters little that the assessee continues to be in receipt of income from its other similar operations."....There are plethora of decisions to this effect like CIT vs. Sharda Sinha(2015)DelhiHC
From India, Jamshedpur
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