income tax deducted

Prashant Kumar Jha (Querist) 06 August 2014 This query is : Resolved
Dear Sir
I'm also an adv but not deal in I/taxes, my query is one man A resigned a company giving letter of resignation & 3 month notice period amount to be realised from his dues to company, company realised the same & issued a certificate of the said amount realised. Then A applied for reimbursement of the deducted notice pay to the present company as per their terms of joining. The present company paid the amount but deducted Rs 69000/- as income tax . My query is that whether the deduction made by the present company is lawful as previous Co has deducted Rs 225000/- as 3 month notice period amount. &The amount is not income this is the amount compensated by present Co in lieu of amt realised by previous Co. It's urgent I request learned experts to kindly sort out my query & oblige.

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Anirudh (Expert) 06 August 2014
Dear Mr. Prashant,

If the amount received from the new company is not 'Income' please indicate what is it?

ajay sethi (Expert) 06 August 2014
answer query raised by MR anirudh

Rajendra K Goyal (Expert) 06 August 2014
The amount received from new company is your income paid by the new company and the company is fully justified in deducting TDS on this amount.File return and claim if any refund. Consult a local Income tax consultant.

Prashant Kumar Jha (Querist) 07 August 2014
Dear sir
Whether the amt paid by present company in lieu of the deducted amt by previous company will b income? In my opinion that is compensatory amt. 1st deducted by prev co then compensated by present Co. Pls clear the matter Sir
Regards
Prashant

Anirudh (Expert) 07 August 2014
In that case will you treat the amount paid by the first company as 'income'? (Here, you will say that you have returned it, so it was not your 'income'). If that be so, the amount received from the new company (by whatever name you call it - whether as compensation etc.) is nothing but income.

Guest (Expert) 07 August 2014
Income is income for all puroses with whatever nomenclature that is disbursed. Any payment by your client as a compensation to his previous employer was not deductible from his taxable annual income under any section of tax laws.

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