Any amount of compensation received by an employee from his employer or former employer in connection with the termination of employment or modification of terms and conditions of employment is regarded as profits in lieu of salary.
– Profits in Lieu of Salary :
It is not appropriate to term certain
payments made by an employer to employee as 'salary'. As per
17(3), such payments
can be alternatively called as 'profits in lieu of salary'.
Taxable portion of retrenchment compensation or voluntary retirement;
Taxable portion of gratuity, commuted pension and provident fund;
Amount received by the employee under Keyman Insurance Policy;
Amount received before taking
up the employment or after termination of the employment; and
Any other payment notified
for this purpose.
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