I Have recently quit one company and joined a new company the following occurred: 1) I had to pay notice pay of two months. Will i get IT rebate on the Amount Paid as notice pay to previous employer? 2) Present Employer has paid that amount along with Salary but has deducted the ITax applicable.
1 Answers
Payment due to shortfall in serving notice period is an expense and deduction is not available for it.
Its a penalty imposed by the employer for not serving notice period. In Income tax no exemption or deduction is allowed for penalty.
Amount paid by new employer will act as joining bonus and would be taxable as normal taxable income.
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