Salary cut for not serving notice? TDS on full month’s pay will also be deducted

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  • Last Updated on 1 February, 2021

20 Jan 2021

Naveen Wadhwa, Deputy General Manager at Taxmann.com, said:

“There is no provision under the Income-tax Act, 1961 to allow deduction of notice pay forfeited by the employer when an assessee-employee leaves his job, without serving during notice period. In the case of NandinhoRebello v. DCIT [2017] 80 taxmann.com 297 (Ahmedabad – Trib.),the Tribunal also held that only actual salary received by an employee shall be taxed in his hands. It is a rational decision by the Tribunal as an individual should only be taxed on the amount he has actually earned and received,”

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