Hello,
I had to pay a notice period amount to my previous employer. The total amount was 2 lacs. They held last month’s salary of 1.5 Lacs so net amount due was 50k. I paid 50k to my previous employer and got 50k from my new employer under a notice period buyout option. My new employer paid 50k along with my salary and also deducted TDS on it which is fine.
But my question is that, do I need to pay taxes on that 1.5 Lacs which was held by my previous employer and the amount never got credited to my account? I can see that 1.5 lacs under the salary section of AIS and TDS wasn’t deducted from it.
Hi @Vivek_Parmar,
There are various viewpoints on this. One way to look at the situation is, as you have not received the salary, it should not be considered income and hence, not taxable.
However, in your case, you have not received the entire amount, which is ₹2L from your new employer. You have received ₹50,000 on which TDS was also deducted. The remaining ₹1.5L that was withheld by your previous employer will form a part of your compensation and therefore should be taxable
Hence as per my understanding, the amount will be taxable. As TDS was not deducted, you’ll have to calculate the tax amount and pay it.