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.
