Will amount given as penalty for breaking bond be counted in Form 16
07-Jul-2023 (In Corporate Law)
I worked last year with one of the manufacturing company. I worked there almost 20 months and after joining they asked me to sign a bond with for 3 years employment service and as per there policy I did that. But due to some personal reasons I quit the job before completing 3 years. They charged 6 month salary amount under Liquidity Damage category and I paid it through Bank Demand Draft. Same mentioned in my Full and final settlemt letter. My question is - will they consider this amount in form 16? If yes, then under which category?
Hello,
Firstly such bonds are not recognized under the Indian law. Secondly this cannot be claimed as deduction as per Income Tax Act. In my opinion it will not be reflected in form 16 even if it will be mentioned in F and F.
Firstly such bonds are not recognized under the Indian law. Secondly this cannot be claimed as deduction as per Income Tax Act. In my opinion it will not be reflected in form 16 even if it will be mentioned in F and F.
What is Section 10 16 of Income Tax Act?
The Income Tax Act of 1961, Section 10(16), exempts gratuities received by employees at the time they retire, resign, or die. The exemption is applicable to gratuity received from an employer, retirement benefits scheme or fund recognized by Central Government. 13 March 2023
What is Section 26 of the Income Tax Act?
The Income Tax Act (ITA), section 26, deals with the treatment of house income. This section sets out the rules that govern the calculation of income from house property, and the deductions allowed. 9 Mar 2023
What is under Section 10 26AAA of the Income Tax Act?
S. 10 (26AAA), introduced into the ITA by Finance Act 2008. With retrospective effect, from the tax year 1989-1990, it provides tax exemption for an individual who is a Sikkimese, in respect of income that accrues to them or arises from sources in the State Sikkim. 23 Apr 2023
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