on 12-12-2013 8:06 AM
Dear Experts,
We have paid Allowance (Rs 1,50,000) through IT0015 and respective exemption(50,000) maintained in IT0582 in March'13.
In next month i.e. in Aug'13 employee was discharged, so the allowance paid in March needs to be reverted.
To do recovery:
1) -ve entry of Allowance in IT0015 was made in Aug
which gives following result:
Allowance gets reverted i.e. -1,50,000.00 but exemption u/s 10 comes as -1,50,000.00. (Expected exemption is -50,000.00)
2) if -ve entry of allowance made in IT0014 for 01.03.2013 to 31.03.2013 (i.e. for March'13)
then Allowance get recovered as -1,50,000.00 and exemption entry comes as -50,000.00 but tat is not getting considered in total taxable income calculation.
Please suggest how to do recovery so that allowance and exemption should get reverted.
Regards,
Jayesh
Hi Jayesh,
Your second scenario is right, how you will give back exemption for last fy which is already closed, tell employee to apply for Tax returns & you can able to recover allowance but not exemption.
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Dear Kedar,
Employee got allowance of 1.5L and exemption of 50K so he paid tax on 1L in March.
Now if only allowance 1.5L is reverted then his income for this FY is reduced by 1.5L, so he will get Tax benefit on 1.5L, but he had paid tax on 1L only(in March),
so there is plane profit of tax due to exemption of 50K to employee in Mar'13.
Regards,
Jayesh
Hi Kedhar,
After maintaining -ve entry of 1.5l in IT0015 and 1L IT0580, result remains same.
When I go thru INCTX, exemption will be made as minimum of three: (Allowance, Exemptions claimed and entry in V_T7INT9), so in this case values are (-1.5L, +1L, -), so -1.5L considered for exemption.
Regards,
Jayesh
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