Clarification on payment of income tax on penalties paid by the employees in public sector companies
Guest
(Querist) 28 November 2014
This query is : Resolved
It is bring to kind notice that the Telangana State Northern Power Distribution Co Ltd (TSNPDCL) which is having address of,
THE CHAIRMAN & MANAGING DIRECTOR,
HNO: 2-6-30/2, CORPORATE OFFICE,
TSNPDCL, VIDHYUTH BHAVAN, NAKKAL GUTTA,
HANAMAKONDA, WARNGAL-506001, TS
Are collecting heavy illegal penalties from the employee's salaries & retirement benefits as part of punishment against disciplinary cases in corer rupees and understood that they are not paying the Income Tax for such amounts since long time as responsible organization. The Company is showing such type of penalties in employee’s cost to escape from the TAX.
If the same payments are made to employees by the Company, employees are paying the Income Tax regularly. In return when the company is earning such amounts by way of penalties from the employees, they are supposed to pay the Income Tax. Nonpayment of tax by the Company is injustice and loss to the IT Department.
Hence it is requested to clarify the rule position along with authority to take necessary action for collecting tax along with arrears from the Company immediately.
P. Venu
(Expert) 29 November 2014
The query is misconceived. Penalty imposed on the employees do not constitute income for the company.
T. Kalaiselvan, Advocate
(Expert) 03 December 2014
About paying tax on the revenue received by way of penalty from employees can be clarified by a Chartered Accountant, you may consult one in the local and see if you can proceed against the company if they defaulted in paying the tax.
