Dear All,
I am working as a Payroll Manager in a multinational corporation (MNC). One of our employees has raised a query regarding the inclusion of Special Allowance in the salary for the purpose of Notice Period Recovery. According to our company policy, the notice period recovery/payment and the leave encashment are to be based on the gross salary (Basic+HRA+Special). Can anyone guide me to the relevant section in the Income Tax Act or any other law that specifies the Special Allowance as part of the salary?
Thank you.
From India, New Delhi
Acknowledge(0)
Amend(0)
I am working as a Payroll Manager in a multinational corporation (MNC). One of our employees has raised a query regarding the inclusion of Special Allowance in the salary for the purpose of Notice Period Recovery. According to our company policy, the notice period recovery/payment and the leave encashment are to be based on the gross salary (Basic+HRA+Special). Can anyone guide me to the relevant section in the Income Tax Act or any other law that specifies the Special Allowance as part of the salary?
Thank you.
From India, New Delhi
Acknowledge(0)Amend(0)
Hi Anjani,
Since both notice pay recovery and payment, and leave encashment are done on the same components, there should not be any question of non-inclusion of special allowance for notice pay recovery. I do not think there is any law regarding this. Some companies have a policy of notice pay recovery or payment based on gross or basic salary. Therefore, it is up to the company to decide the policy.
Regards,
Harshad
From India, Mumbai
Acknowledge(0)Amend(0)
26Since both notice pay recovery and payment, and leave encashment are done on the same components, there should not be any question of non-inclusion of special allowance for notice pay recovery. I do not think there is any law regarding this. Some companies have a policy of notice pay recovery or payment based on gross or basic salary. Therefore, it is up to the company to decide the policy.
Regards,
Harshad
From India, Mumbai
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
GST ON RECOVERY OF UNSERVICED NOTICE PERIOD.docx
Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
Income Tax Calculator.xls