Dear All,
This is regarding income tax on Superannuation settlement.
I am 41 years old. I resigned from my previous job after 3 years of service during the financial year 2013-14. When the company did my final settlement, they settled my Superannuation amount too, and deducted tax on it. The tax they have deducted was calculated based on the average rate of tax deducted on my income during my last 3 years of employment. This comes to about 20%. That is, the company has deducted apprx. 20% tax on my Superannuation settlement. I got this clarified from the company, and it seems right as per the tax laws.
My total income from all sources for the year comes under the 30% tax bracket. Since the company has deducted 20% tax on the Superannuation settlement, do I need to pay the remaining 10% tax on the Superannuation settlement?
Or, is it that I don't need to pay any more tax on my Superannuation settlement other than what the company has already deducted?
Please clarify...
Thanks,
Kiran
From India, Bangalore
2This is regarding income tax on Superannuation settlement.
I am 41 years old. I resigned from my previous job after 3 years of service during the financial year 2013-14. When the company did my final settlement, they settled my Superannuation amount too, and deducted tax on it. The tax they have deducted was calculated based on the average rate of tax deducted on my income during my last 3 years of employment. This comes to about 20%. That is, the company has deducted apprx. 20% tax on my Superannuation settlement. I got this clarified from the company, and it seems right as per the tax laws.
My total income from all sources for the year comes under the 30% tax bracket. Since the company has deducted 20% tax on the Superannuation settlement, do I need to pay the remaining 10% tax on the Superannuation settlement?
Or, is it that I don't need to pay any more tax on my Superannuation settlement other than what the company has already deducted?
Please clarify...
Thanks,
Kiran
From India, Bangalore
No, you don't have to pay extra 10% tax on SA amount; what the company has done is perfectly correct & is as per IT Act provisions in this regard.
While filing ITR, u need to show the SA earnings separately under a different slab category; in case of doubt pls check with a CA before filing ur ITR.
From India, Mumbai
While filing ITR, u need to show the SA earnings separately under a different slab category; in case of doubt pls check with a CA before filing ur ITR.
From India, Mumbai
Dear Mr. Dixon,
Thank you for your reply. Subsequent to your reply, I consulted with few CAs. However, they did not give me a conclusive reply.
Would you be kind enough to elaborate on how to show the superannuation settlement under a different tax slab? I did not find a way to account it in ITR-1 form.
Truly appreciate your response.
Thanking you.
Regards,
Kiran
From India, Bangalore
Thank you for your reply. Subsequent to your reply, I consulted with few CAs. However, they did not give me a conclusive reply.
Would you be kind enough to elaborate on how to show the superannuation settlement under a different tax slab? I did not find a way to account it in ITR-1 form.
Truly appreciate your response.
Thanking you.
Regards,
Kiran
From India, Bangalore
Dear Mr. Dixon,
Thank you for your reply. Subsequent to your reply, I consulted with few CAs. However, they did not give me a conclusive reply.
Would you be kind enough to elaborate on how to show the superannuation settlement under a different tax slab? I did not find a way to account it in ITR-1 form.
Truly appreciate your response.
Thanking you.
Regards,
Kiran
From India, Bangalore
Thank you for your reply. Subsequent to your reply, I consulted with few CAs. However, they did not give me a conclusive reply.
Would you be kind enough to elaborate on how to show the superannuation settlement under a different tax slab? I did not find a way to account it in ITR-1 form.
Truly appreciate your response.
Thanking you.
Regards,
Kiran
From India, Bangalore
Dear Kiran,
The information provided here by you is very much inadequate. There is no one single item called superannuation settlement, it should be either in the form of salary or arrears of salary, or gratuity or PF or pension or what ?. Unless you mention specifically item wise with nature of payment it's not possible to give you an appropriate opinion on that. I'm also not sure at the age of 41 yrs. superannuation settlement is new to me. And I further could not believe even CAs didn't give you 'conclusive opinion' & still puzzles me as they are the concerned to give a proper advice. Pl.give full details so that I can try.
From India, Bangalore
The information provided here by you is very much inadequate. There is no one single item called superannuation settlement, it should be either in the form of salary or arrears of salary, or gratuity or PF or pension or what ?. Unless you mention specifically item wise with nature of payment it's not possible to give you an appropriate opinion on that. I'm also not sure at the age of 41 yrs. superannuation settlement is new to me. And I further could not believe even CAs didn't give you 'conclusive opinion' & still puzzles me as they are the concerned to give a proper advice. Pl.give full details so that I can try.
From India, Bangalore
Dear Sir,
I worked in an IT company. My salary structure included the following "Retirement" components: (1) Provident Fund, (2) Gratuity, (3) Superannuation, apart from other components of the Salary. The one I am talking about is this Superannuation component of the retirement benefits. (It is not part of PF or Gratuity, or Pension).
My company has an associated trust called "Employee's Superannuation Fund Trust", in which the Superannuation contribution was deposited by the company on a monthly basis. Unlike PF, the company made no deduction from my monthly salary towards the superannuation fund. So, obviously, it had only the employer's contribution.
When I resigned from the company after 3 years of service, I was given the option to withdrawal the accumulation in my Superannuation fund from the company's Superannuation Trust. I exercised this option, hence received the Superannuation settlement amount as part of my final settlement.
By the way, my PF settlement were done separately from the company's Provident Fund trust, another entity. Likewise, my Gratuity settlement was also done separately. In addition, I also received my accumulation from the Employee Pension Scheme (EPS). All these settlements were in addition to the Superannuation settlement.
Hope the above information provides more clarity. If you do need more information, please do let me know.
Warm Regards,
Kiran
From India, Bangalore
I worked in an IT company. My salary structure included the following "Retirement" components: (1) Provident Fund, (2) Gratuity, (3) Superannuation, apart from other components of the Salary. The one I am talking about is this Superannuation component of the retirement benefits. (It is not part of PF or Gratuity, or Pension).
My company has an associated trust called "Employee's Superannuation Fund Trust", in which the Superannuation contribution was deposited by the company on a monthly basis. Unlike PF, the company made no deduction from my monthly salary towards the superannuation fund. So, obviously, it had only the employer's contribution.
When I resigned from the company after 3 years of service, I was given the option to withdrawal the accumulation in my Superannuation fund from the company's Superannuation Trust. I exercised this option, hence received the Superannuation settlement amount as part of my final settlement.
By the way, my PF settlement were done separately from the company's Provident Fund trust, another entity. Likewise, my Gratuity settlement was also done separately. In addition, I also received my accumulation from the Employee Pension Scheme (EPS). All these settlements were in addition to the Superannuation settlement.
Hope the above information provides more clarity. If you do need more information, please do let me know.
Warm Regards,
Kiran
From India, Bangalore
Dear Kiran,
Pl.be informed the Superannuation settlement what details you have provided neither arising out of any of your 'termination on a/c of closure of estt' or 'voluntary retirement before the specified age of superannuation' to qualify for exemption u/s.10 of IT Act. It is a payment made on your resignation. As such It's in fact to be taxed as form part of salary received in advance having been not classified either as 'Gratuity' or 'PF/leave encashment on retirement' where there is specific exemption available under IT Act. For you a ref., more or less similar to your case decided earlier by the Competent Authority is attached which will give better understanding of IT provisions in this regard.
From India, Bangalore
Pl.be informed the Superannuation settlement what details you have provided neither arising out of any of your 'termination on a/c of closure of estt' or 'voluntary retirement before the specified age of superannuation' to qualify for exemption u/s.10 of IT Act. It is a payment made on your resignation. As such It's in fact to be taxed as form part of salary received in advance having been not classified either as 'Gratuity' or 'PF/leave encashment on retirement' where there is specific exemption available under IT Act. For you a ref., more or less similar to your case decided earlier by the Competent Authority is attached which will give better understanding of IT provisions in this regard.
From India, Bangalore
In ITR 1, see clause 20 (TDS) & enter the details therein. Also before doing so, get the Form 16 for this deduction separately & also check your Form 26 AS about the tax credit.
From India, Mumbai
From India, Mumbai
Dear Mr. Kiran,
As per my opinion the Superannuation is taxable when withdrawal before superannuation date.
If you withdraw the same before superannuation date, employer will do TDS at average 3 yrs tax.
You have to show this as salary income in your return and need to pay differential Tax on SA amount.
Even though you purchase annuity from LIC, the monthly / quarterly / Annually amount received, you have to show as Income and pay Tax.
Even you take 1/3rd withdrawal, the withdrawal amount is taxable.
Thanks,
Bhat
From India, Pune
As per my opinion the Superannuation is taxable when withdrawal before superannuation date.
If you withdraw the same before superannuation date, employer will do TDS at average 3 yrs tax.
You have to show this as salary income in your return and need to pay differential Tax on SA amount.
Even though you purchase annuity from LIC, the monthly / quarterly / Annually amount received, you have to show as Income and pay Tax.
Even you take 1/3rd withdrawal, the withdrawal amount is taxable.
Thanks,
Bhat
From India, Pune
Dear Mr. Bhat,
Thank you very much for your response. Based on your response, and also from other responses (that of Mr. Kumar, etc.) on this thread, it is clear to me now that I have to pay the differential tax on my superannuation settlement. I will do so. Your response has been of immense help to me in gaining clarity on this matter. Thanks so much !
Warm Regards,
Kiran
From India, Bangalore
Thank you very much for your response. Based on your response, and also from other responses (that of Mr. Kumar, etc.) on this thread, it is clear to me now that I have to pay the differential tax on my superannuation settlement. I will do so. Your response has been of immense help to me in gaining clarity on this matter. Thanks so much !
Warm Regards,
Kiran
From India, Bangalore
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