Retrechment
Is the compensation at the time of retrechment is taxable. How to save taxes for such income
Asked on 3/04/09, 9:12 pm
1 Answer from Attorneys
SHIVA SHANKAR REDDY
M/S S&S LAW FIRM
Re: Retrechment
Retrenchment compensation is defined as "Profits in Lieu of Salary" u/s 17 of the I t Act .Hence ,it taxable under the head "salary' . However, retrenchment compensations is exempt u/s 10(10B ) of the I T Act up to Rs 5,00,000 [vide notification No 10969, dated 25-6-1999] if following conditions are fulfilled
Compensation is received
* by a "workman".
* his retrenchment was as per Industrial Disputes Act 1947; or
* Any other Act or rules or any order or notification issued there under; or
* Any standing order; or
* any award,contract of service or otherwise
Answered on 3/04/09, 11:45 pm
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