Employer Premature Termination Of Contract - Taxation

Any amounts paid by the employer to the employee for premature termination of a contract of employment are treatable as taxable or tax free in hands of employee ?

3 Likes

Everything paid to Employee by Employer is taxable unless it is a Gratuity as per Gratuity Act.

4 Likes

Any such compensation paid by employer for termination of contract without serving the required notice period will be part of the employee’s taxable income.

4 Likes

Thank you For update :grinning:

2 Likes

One Question : Can the employee obtain a deduction for legal expenses incurred in relation to the termination of employment/contract?

1 Like
Powered by | India's No.1 Payroll and HR Software.
9000+ Clients
150 Cities
10 Lakh+ Users