| Q. What is the maximum amount not chargeable to
tax for leave salary whether on Superannuation or otherwise as specified
by the Government?
A. The maximum amount not chargeable to tax beginning
from July 1, 1995 is Rs. 1,35,360/- as specified by the Government.
Q. What is the maximum limit of compensation received
at the time of voluntary retirement, that is not taxable?
A. U/s 10(10C) of the Income Tax Act, a sum upto
Rs. 5,00,000/- received at the time of voluntary retirement is not
taxable provided the voluntary retirement scheme is approved or
framed as per the Rules. For details please see the module on Income
from Salaries.
Q. Whether any TDS has to be deducted on the amount
received under an approved voluntary retirement scheme?
A. If all the specified conditions are satisfied
the employer need not deduct TDS on the amounts paid under the Voluntary
Retirement Scheme. However, tax at source shall have to be deducted
on amounts exceeding the prescribed monetary limit of Rs. 5 Lakhs
paid under the Scheme.
Q. Whether pension is salary?
A. Yes, pension is treated as salary under the Income
Tax Act and is taxable under the head Income from Salary. For details
see the module pension under the head Income from Salaries.
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