Deduction of Income Tax for reimbursement of Notice Period

[Pradeep Jain]

Querry is that -

Is present employer is liable to deduct TDS on  reimbursement the amount of notice period  to new employee ?. We seek your valuable legal advise,

Thank in advance.

Pradeep Jain

[manoj kumar]

As  per section 192,tax is deductible on any amount which is paid by employer to employee by reason of employment.

As Notice Period amount is paid by reason of employment,So Tax at source is deductible from payment to new employee.

AI Summary

Taxability of notice period reimbursement: employers must withhold income tax from employment-related notice payments.
Reimbursement of a notice period paid to an employee is treated as employment income for withholding purposes; because the payment is made by reason of employment, the employer is obliged to deduct tax at source from that reimbursement.