I left the company on 12th Mar, I was told full and final settlement will be paid after 45 days. I have so far not received it(it will be cleared on Oct 31 only). But, I have got provisional form 16 with full and final settlement. I have paid taxes without including final dues. Do I have to pay extra now?
Salary income is assessed on accrual basis. Hence, you can offer the terminal benefits as salary income in the year in which you left the company, even if you have not received it and claim TDS as per 26AS.
There is no need to offer the settlement amount again when it is received, as it was already offered in the year in which it became due.
TDS? How can I claim TDS under which section?
The company has not deducted any TDS, it is 0. My salary income and income from other sources together is above tax limits, so I have to pay tax. I have already filed returns excluding final settlement. The company has not yet uploaded form 16 and so nothing is there in 26AS now.
As the company has also not deducted TDS and you also did not receive income, offer it on receipt basis in the year in which you receive the settlement money. Though it is not entirely appropriate, this will be less cumbersome than other ways of regularizing your tax situation.
Thank you for your prompt response. What about form 16? The so called provisional form 16 given to me includes final settlement and it has many errors in it. Conveyance amount and medical reimbursement are not properly considered, the date is given as June, 2013! Even though I came on roll of the company on 1st April, 2014 and form 16 is for the financial year 2014-15. When I asked the finance person, I was told the date will be rectified and given. What if that is uploaded and reflects in 26AS?
In the present case you can declare the final settlement on receipt basis.
If you have already filed the return then you can revise the same after you are clear about your details regarding TDS and clarity about other details and rectification of all errors.
you request the employer to provide you with correct form no 16. System wont accept any invalid details as june 2013
