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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.
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Adv. Purvi Shah
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