Any income tax deductions available for severance received due to layoff? I was a managerial employee and the company added this amount to my salary.
Hi @karan,
Under Indian tax rules, severance pay received due to a layoff is generally treated as part of your salary and is taxable under the head “Income from Salary.” It does not qualify for any specific tax deductions.
However, if the severance is received as gratuity payment, you may be eligible for a deduction under Section 10(10C), but this depends on the nature of the payment. Kindly check!
Hope this helps.