Income tax on notice period recovery

My previous company having 90 days notice period. i server 45 days notice and they hold 45 days salary "Rs 90,000 "as of short notice period recovery. now they said i have to pay 45 days Income tax "Rs 9000" which amount i never received. 

I didn't not received 45 days salary"Rs 90,000"  and still i have to pay income tax for that ? please help me to understand the tax.
Asked 4 months ago in Income Tax from Pune, Maharashtra
Hello, in the case of salary the tax is calculated taking into account the entire years salary and investments made for availing deduction u/s 80C, 80CCC 80D etc, and then a rate is arrived based on which the TDS is deducted every month from the employees salary. In your case where the salary is not paid, there should be no tax liability for the same. 

Ria Nagpal
CA, Ahmedabad
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Hi,
No you dont have to pay tax on what you have not received or likely to receive in future.
As you have not served for the remaining 45 days , you havent earned that Rs 90000. 
Salary income is chargeable to tax on “due basis” or “receipt basis” whichever is earlier. 

Income from salary taxable during the year shall consists of following:

i. Salary due from employer (including former employer) to taxpayer during the previous year, whether paid or not;

ii. Salary paid by employer (including former employer) to taxpayer during the previous year before it became due;

iii. Arrear of salary paid by the employer (including former employer) to taxpayer during the previous year, if not charged to tax in any earlier year;
in your case neither is the case. So You are not not liable to pay tax on Rs 90000
Vishakha Agarwal
CA, Bangalore
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Hi, 
I assume if company is showing salary for 11 months and 23 days in form 16, so they must have deducted tds on the same and deposited.
form 16 is not a full proof evidence of the salary, it is proof of tds deducted  from salary and deposited on ones behalf. you can file the return on the basis of actual salary received and can claim the refund. if there is no chance of receiving the remaining amount of your salary in future.but you should have the proof of all the documents that actual salary which you have earned and received is only for 10 months, in case scrutiny of case arises.

you can call me on 9538801976. if you have further query
Vishakha Agarwal
CA, Bangalore
213 Answers
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Hello this is Ria Nagpal here

In the case as mentioned above the company is considering the 45 days salary that they would pay to you and then you would pay it back to them for the shortfall in notice period being served. It is right that the 45 days salary would be included in your income. As far as your paying Rs 9000 to your company is concerned, it will depend upon the calculation being shown in Form 16 , the tax already deducted and the tax liability still outstanding which can be made out only after looking at the papers. If there is any shortfall in your tax you could directly pay to the income tax department at the time of filing your IT Return.
Ria Nagpal
CA, Ahmedabad
28 Answers
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Dear Sir,

Can you please elaborate the situation or send us the form 16. Please let us know the following

1. Your employment period (from DD MM YYYY to DD MM YYYY)
2. Salary considered for how many months in the form 16

Please note that out of 90 days notice period, salary of only 45 days should be part of your income and tax should be deducted because you were in employment only for 45 days. 

Please feel free to call/ revert in case of any doubts

Thanks and regards
Abhishek Dugar
CA, CS, B.Com
Caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
766 Answers
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Dear Sir,

I read your follow-up part and i understood the situation fully now.

The company is right in doing so. The salary income has accrued to you and you were liable to pay tax for 45 days.

Please feel free to call/ revert in case of any doubts

Thanks and regards
Abhishek Dugar
CA, CS, B.Com
Caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
766 Answers
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Sorry I think your question is already answered
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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