ITR
Joining bonus that had to be paid back
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Facts
A joining bonus is taxed as salary in the year received. If you repay it in the same year and the employer reverses it in payroll, only the net amount is taxed.
Provisions and law
- Sec 17, Income-tax Act 1961 (now Sec 16 to 18)Salary includes bonuses, allowances and perquisites received from an employer.
Analysis
If you got ₹1,00,000 in July and repaid it in December of the same year through payroll recovery, Form 16 should show the net. If you repaid in a later year, the tax treatment is less clear; keep proof and take advice before claiming relief. Check what the employer reported.
Conclusion
- Check Form 16 for how the bonus and recovery are shown.
- Keep proof of repayment.
- Report salary as per the corrected Form 16.
- Seek advice if repayment was in a later year.
A Savvy can do this for you
Return after a job switch with two or more Form 16s
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