Tax on severance pay

File your ITR in ITR 1 form if only salary & other income claim ded u/s 80 c for investment last date is 31 july do fast

Even if the Form - 16 does not show the investments made by you, you can claim investments made by you subject to the conditions of section 80 C in your return of income and claim deduction.

Taxability of leave encashment and gratuity received is to be determined case to case. The entire amount cannot be considered as exempt. To determine the exemption value conditions as specified in section 10(10) and section 10(10AA) of the Income Tax Act, 1961 are to be considered. If the conditions are fulfilled accordingly the exemption of the amount can be claimed in the income tax return.

Dear Sandeep,

There is no doubt on claiming the deduction u/s 80C for the investment done even if doesn't form part of Form 16.

pl be clarify the your question clearly

Dear Sandeep

The pay you have received as a part of terminating the employment is taxable under the head income from other sources. And you can claim refund using deduction u/s 80C provided you have all the relevant supporting documents.

Hi,

Yes you can claim deduction under section 80c even if it does not form part of Form 16. However, please ensure that you have actually invested and you have the proof of the same before taking the exemption. You can get in touch with me for further clarifications.

Regards,

Nikhil.

Hi

Firstly, with respect to deductions, you can claim the actual deductions for investments if they are not shown in Form 16. But, be sure that you will receive a notice for mismatch of income in return and 26AS. In turn, you'll have to submit valid proofs of deductions claimed.

Further, severance pay is a capital receipt and hence not taxable.

However if there are other inclusions like gratuity or leave encashment in severance pay, normal rules for taxation shall apply on such income.

Hi,

Yes, you can claim deductions under section 80C even if it has not been shown in your Form 16.

With respect to severance pay, you can treat it as a capital receipt and no need to pay tax. this view is supported by Delhi high court in case of CIT vs. Sharda Sinha.

Further, the law has been amended from 1 April 2018 to include severance pay in income from other sources. This itself shows that earlier the severance pay was out of income tax scope.

With respect to Gratuity and LTA, the same shall be taxable under the head Salary. However, you will get the appropriate deductions for gratuity and LTA as per the income tax rules

Hi,

Hope you are doing well !

Severance pay is a capital receipt. It is not taxable.

You can claim 80C deductions even if they are not shown in form 16 provided you have valid investment proof.

Thanks & Regards,

Payal Chhajed

yes, you can claim deduction under section 80C even if not shown in form 16

1 .80C deduction can be claimed even if not reflecting in form 16.

2. Severance pay is exempt.

Dear Sir,

1) Yes, as long as you have the proof of investment in hand you can claim your investment as a deduction U/s.80C even if it is not mentioned in Form 16.

2) Yes, Severance pay is taxable in the year of receipt even though you were not employed.

Yes you can claim investments even if it is not shown in Form -16 provided you have evidence. Severance pay received will be taxable in the year of receipt. The Assessee being unemployed is not of significance.

Dear Sir,

1. Yes, if you have valid proof of investments you can claim deduction u/s 80C if it not reflecting in form 16 issued by company.

2. Severance pay will be taxable in the year of receipt even if you were unemployed in that period.

Warm Regards,

Karishma Chhajer

Dear Sir,

Taxability of severance pay i.e. gratuity and leave encashment will be calculated as per Income tax calculations. There are criterias for calculation of gratuity and leave encashment pays.

In case of investment u/s 80C, if you have valid proofs of investment then you can claim them while filing ITR even though they are not reflected in Form 16.

Thanks