Dear All,
I would like to know that i was committed that the notice period amount of previous company would be reimbursed by the company, when finally when the new company reimbursed, they deducted the income tax from the amount they were reimbursing of the notice pay. is it justified, i feel it's not correct as it is not my income.
Regards
prabhakar
From India, Delhi
4I would like to know that i was committed that the notice period amount of previous company would be reimbursed by the company, when finally when the new company reimbursed, they deducted the income tax from the amount they were reimbursing of the notice pay. is it justified, i feel it's not correct as it is not my income.
Regards
prabhakar
From India, Delhi
Hi Prabhakar,
The claim for Shartfall of notice period is an income not reimbursement. Therefore, the TDS will be deducted.
To make it easy to understand, had you not left the organisation, you would have received the same amount in your income.
Hence, it is not the reimbursement as you have not bear the expenses for which you are claiming.
Hope its is clear.
Regards,
Satpreet Kaur
From India
The claim for Shartfall of notice period is an income not reimbursement. Therefore, the TDS will be deducted.
To make it easy to understand, had you not left the organisation, you would have received the same amount in your income.
Hence, it is not the reimbursement as you have not bear the expenses for which you are claiming.
Hope its is clear.
Regards,
Satpreet Kaur
From India
Dear Ms.Satpreet kaur,
Thanx for the reply, but i am still confused. i Will explain you again, i left x company paying 2 months notice pay of 2 lacs. Y company agreed to pay my notice period amout of 2 lacs. When Y company gave me the salary for December salary ,they reimbursed that amount after deducting tax. As you said it's my income, where does the question comes of income, it's only i paid to X company 2 lacs and joined Y company. and y company had deducted the income tax from the salary they paid.
My question was let Y pay directly to X company, why i should loose the amount. i hope u understood my question now.
Regards
Prabhakar
From India, Delhi
Thanx for the reply, but i am still confused. i Will explain you again, i left x company paying 2 months notice pay of 2 lacs. Y company agreed to pay my notice period amout of 2 lacs. When Y company gave me the salary for December salary ,they reimbursed that amount after deducting tax. As you said it's my income, where does the question comes of income, it's only i paid to X company 2 lacs and joined Y company. and y company had deducted the income tax from the salary they paid.
My question was let Y pay directly to X company, why i should loose the amount. i hope u understood my question now.
Regards
Prabhakar
From India, Delhi
Hi Prabhakar,
As I explained earlier, this is not the expense which was borne by you, for which you are claiming for reimburesement. It's an income for two months which you would have received from the previous employer if you had served the notice period.
Pls read below example:
You were working with Co. X and resigned and co. X asked you to serve a notice period of 2 months. In other words, to continue with the service for another two months for proper handover. But Co. Y wanted you to join early and agreed to pay you the loss of payment for 2months shortfall. Therefore, the payment which you were earlier supposed to get from Co. X, are now receiving from Co. Y. Thus, the TDS has been deducted since its a payment not a reimbursement.
Hope its clear now.
Regards,
Satpreet Kaur
From India
As I explained earlier, this is not the expense which was borne by you, for which you are claiming for reimburesement. It's an income for two months which you would have received from the previous employer if you had served the notice period.
Pls read below example:
You were working with Co. X and resigned and co. X asked you to serve a notice period of 2 months. In other words, to continue with the service for another two months for proper handover. But Co. Y wanted you to join early and agreed to pay you the loss of payment for 2months shortfall. Therefore, the payment which you were earlier supposed to get from Co. X, are now receiving from Co. Y. Thus, the TDS has been deducted since its a payment not a reimbursement.
Hope its clear now.
Regards,
Satpreet Kaur
From India
Notice Pay reimbursements are always taxable as it is the income on the hands of employees. Satpreet has rightly explained. Pon
From India, Lucknow
From India, Lucknow
whats the tax deduction rule for notice pay reimbursement amount . what I feel is I should be getting the same amount in hand by my new employer what I was getting by my previous employer after tax deductions but the same is not correct in my case. More tax has been deducted by my new employer.
From India, Bangalore
From India, Bangalore
The rule for Tax deduction is same as whats applicable for income tax. You would be feeling that more has been deducted as now with the increased income with the new salary plus the notice pay... The tax would surly be higher if the investments are not in place...
Regards.
Ashutosh Thakre
From India, Mumbai
Regards.
Ashutosh Thakre
From India, Mumbai
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