Dear All,
We have paid the retention bonus to employee after deducting the TDS now employee leave the company before the specified time, now employee has to pay the retention bonus back to the company . now my question employee has to pay net amount which is credited to his account or has to pay gross including tds amount ?
From India
We have paid the retention bonus to employee after deducting the TDS now employee leave the company before the specified time, now employee has to pay the retention bonus back to the company . now my question employee has to pay net amount which is credited to his account or has to pay gross including tds amount ?
From India
Dear Vijay Kulkarni,
While paying the retention bonus to the employee, did your company make a formal agreement with the employee? If not the formal agreement, then did the company issue any letter to the employee mentioning the terms and conditions of the recovery of the amount? What was the expected retention period of the employee, and of that, how many months did the employee complete? Does the agreement/letter state anything about the total recovery or the proportionate recovery of the retention bonus?
There are so many questions associated with your post. Please clarify the situation.
Whatever the case may be, whether the total or the proportional recovery of the bonus, the employee can pay back only the amount he received. You cannot force the employee to pay the taxes (TDS). This is because the tax was paid to the government, and not to the employee.
Thanks,
Dinesh Divekar
From India, Bangalore
7881While paying the retention bonus to the employee, did your company make a formal agreement with the employee? If not the formal agreement, then did the company issue any letter to the employee mentioning the terms and conditions of the recovery of the amount? What was the expected retention period of the employee, and of that, how many months did the employee complete? Does the agreement/letter state anything about the total recovery or the proportionate recovery of the retention bonus?
There are so many questions associated with your post. Please clarify the situation.
Whatever the case may be, whether the total or the proportional recovery of the bonus, the employee can pay back only the amount he received. You cannot force the employee to pay the taxes (TDS). This is because the tax was paid to the government, and not to the employee.
Thanks,
Dinesh Divekar
From India, Bangalore
Thank you sir for the reply I will get back to you the all the details you asked for last comments on TDS
TDS paid to govt on employee name only and employee have may taken refund or adjusted for the tax liability so we should get full amount including TDS right ?
From India
TDS paid to govt on employee name only and employee have may taken refund or adjusted for the tax liability so we should get full amount including TDS right ?
From India
Dear Vijay Kulkarni,
The learned senior member, Mr Saswata Banerjee is the right person to answer your query on the TDS. I will send a private message to draw his attention to this thread.
Thanks,
Dinesh Divekar
From India, Bangalore
The learned senior member, Mr Saswata Banerjee is the right person to answer your query on the TDS. I will send a private message to draw his attention to this thread.
Thanks,
Dinesh Divekar
From India, Bangalore
Thanks for drawing this interesting query to my attention, Dinesh-ji
TDS is deducted and paid to the government, but it will be credited to the 26AS of the employee. (effectively as Advance Tax). If he has tax to pay at the end of the year, the TDS in 26AS gets adjusted against it. If there is no tax liability, the remaining TDS amount is refunded to the employee
So from the company's point of view, the TDS is a part of the bonus payment.
Therefore the employee will be asked to pay the full bonus (gross amount) back including the TDS.
From India, Mumbai
TDS is deducted and paid to the government, but it will be credited to the 26AS of the employee. (effectively as Advance Tax). If he has tax to pay at the end of the year, the TDS in 26AS gets adjusted against it. If there is no tax liability, the remaining TDS amount is refunded to the employee
So from the company's point of view, the TDS is a part of the bonus payment.
Therefore the employee will be asked to pay the full bonus (gross amount) back including the TDS.
From India, Mumbai
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Retention quest.doc
Employee-retent ion-plan_1__185 .pdf