Sir / Madam,
I have one query that, Can employer pay retired employees all dues like Leave Encashment, gratuity, Pay arrears etc. in two different Financial years, so that employee could get Income tax benefit? e.g If one employee is retired on Nov'12, then he is due for all retirement benefits like gratuity, Leave encashment in same F.Y., But along with his salary for that perticular F.Y., he is liable for heavy tax on that income. So can employer and employee has mutual discussion on same and pay some part of his retirement dues in next F.Y. so that employee could get income tax benefit?.
Please answer this query in employer's point of view considering the rules and regulations of Income Tax Act, 1961.
Regards,
Harshada
From India, Mumbai
I have one query that, Can employer pay retired employees all dues like Leave Encashment, gratuity, Pay arrears etc. in two different Financial years, so that employee could get Income tax benefit? e.g If one employee is retired on Nov'12, then he is due for all retirement benefits like gratuity, Leave encashment in same F.Y., But along with his salary for that perticular F.Y., he is liable for heavy tax on that income. So can employer and employee has mutual discussion on same and pay some part of his retirement dues in next F.Y. so that employee could get income tax benefit?.
Please answer this query in employer's point of view considering the rules and regulations of Income Tax Act, 1961.
Regards,
Harshada
From India, Mumbai
The law/act prescribes specific/due date for all statutory obligations of the employer, so the employer has no choice in such matters.
From India, Pune
173From India, Pune
Gratuity
The Act clearly stipulates that Gartuity should be paid within 30 days from the date it falls due. So you are bound to pay the Gratuity within the stipulated time. Employers have no option.
Earned Leave encashment
Earnings from EL encashment is not taxable if earned at the time of retirement. So you need worry about tax implications.
Pay Arrears
I did not understand what you mean by pay arrears.plz explain
From India, Pune
The Act clearly stipulates that Gartuity should be paid within 30 days from the date it falls due. So you are bound to pay the Gratuity within the stipulated time. Employers have no option.
Earned Leave encashment
Earnings from EL encashment is not taxable if earned at the time of retirement. So you need worry about tax implications.
Pay Arrears
I did not understand what you mean by pay arrears.plz explain
From India, Pune
Which all retirement benefits attract tax? My understanding is that gratuity subject to an amount of Rs 10 lakhs is non taxable. Similarly, leave encashment at the time of superannuation is also non taxable. Then PF accumulations is another benefit that the employee gets and that is also non taxable. Then why should there be payment in two installments? Now if the employer thinks of his cash out flow rather than the employer's tax liability, I will stand with employee only!!
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
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