Ram 20 July 2016

Company not paying right money

I have joined my current company in January 2016 and they gave me a joining bonus of 2 Lakhs. When they paid the joning bonus as part of my salary, they deducted tax (TDS). So I got only around 1.6 Lakhs at hand as part of joining bonus after tax.

In the offer letter, it was mentioned that if I resign before a year, then the joining bonus of 2 Lakhs will be deducted.

Now I had to resign due to domestic reasons.

They are saying they will deduct the whole 2 Lakhs of joining bonus and not 1.6 lakhs. While they have paid tax to the government, I want to know whether they can deduct the whole of 2 lakhs or they should deduct only 1.6 lakhs (after tax).

My problem is that because the joining bonus was given in previous financial year (2015-16) and the deduction is done in this financial year, I am losing 40 thousand rupees.

Can you help on how to deal with it please?

Reply Follow

6 Replies

JustAdvisor (IT) 20 July 2016

TDS is paid to government on your account. hence employer has made payment of 2 lacs to you and entitled to refund of full 2 lacs. you may however show the employment contract to an able counsel to examine if there is any way out and you can be exempted from refunding this all together.

NARENDER RAO BASAVARAJU (Advocate) 21 July 2016

IT IS TO BE UNDERSTOOD THAT YOU HAVE TO RETURN TWO LAKHS TO THE COMPANY, (INCASE YOU RESIGN WITHIN ONE YEAR) AND HENCE THEY HAVE DEDUCTED 2 LAKHS.

AGAIN, THERE IS AN OBLIGATION FOR THE COMPANY TO DEDUCT TAX AND HENCE THEY HAVE DEDUCTED.

CONSULT A SENIOR CA FOR ANY SCOPE OF REFUND IN SUCH CASES

P. Venu (Advocate) 21 July 2016

The condition appears to be void and hence unenforceable.

Kumar Doab (FIN) 21 July 2016

What was to be covered in Joining Bonus/

Did you consult your own able counsel specializing in labor/Service Matters before negotiating with company, during negotiations, after negotiations and before resigning and Now?

If yes what is the opinion of your own counsel?

Hope you recieved the form16 ( covering joining bonus too) and have filed ITR for last year.

If yes this bonus is shown under which head?

Is the company willing to show recovery in FnF statement?

If yes, under which head?

Does company allow you to subject the penalties to TDS?

You may consult your own counsels and ITax lawyer also.

Suri.Sravan Kumar (senior) 21 July 2016

It appears to be a strange condition. I never came across about joining bonus. Did they issue any TDS certificate for the tax deducted from you?

balas (Chartered) 22 July 2016

Hi Ram,

The contract you have entered with your employer is valid and enforceable.

The Bonus would have been treated as profits in lieu of salary earlier.

Now that you are leaving and you need to repay, the same should get reflected in your form 16 for the current fin. year. Your issue is you paid taxes on salary i.e. bonus, in earlier year and you are now refunding the same in c. fin year as transactions spans multiple years.

In your case you need :

a. To Claim relief u/s 89.

b. For claiming relief u/s 89, you need to Submit Form 10E vide rule 21AA while submitting the ITR for the cur.fin.year.

This should settle your issue.

Balaji Srini FCA., LL.B.