I used to be paid ₹10 lakh as a becoming a member of bonus, which I used to be required to refund if I left the employment inside three years. The identical was included in my type No. 16, and tax was deducted at supply on this becoming a member of bonus quantity. I made a decision to give up my employment earlier than finishing three years, and subsequently needed to refund your entire becoming a member of bonus quantity. Can I declare the bonus refunded towards my wage earnings?
Any quantity obtained from the previous or current employer is taxed below the pinnacle of salaries, and the employer is required to deduct the suitable tax on the time of cost of the becoming a member of bonus.
Are you able to declare the deduction?
So, the becoming a member of bonus you obtained was taxable in your fingers as wage, and your employer appropriately handled it as wage and deducted the suitable tax from it. Although the becoming a member of bonus was taxable in your fingers on the time of its receipt, there isn’t any provision below the income tax legal guidelines to permit any deduction in case the identical is required to be refunded to the employer.
So, although you’ve gotten paid taxes on the quantity of the becoming a member of charge obtained, you’ll not obtain a deduction for refunding it.
What do the tax regimes say?
Below the tax legal guidelines, presently, two gadgets are eligible for deduction towards wage. The primary is the usual deduction, which each and every salaried and pensioner is eligible for.
The quantity of standard deduction out there below the previous tax legal guidelines is restricted to ₹50,000/- the place as you get the next deduction as much as ₹75,000/- in case you go for the brand new tax regime.
The second deduction is accessible in respect of the quantity {of professional} tax deducted by your employer. Apart from these two deductions, no different deduction is accessible towards the quantity of taxable wage.
Balwant Jain is a tax and funding professional and may be reached on jainbalwant@gmail.com and @jainbalwant on his X deal with.
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