Left company in March, income should be treated in which FY/AY

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  1. sumitgupta22

    sumitgupta22 New Member


    I left my previous organization on 29.03.2016. I received my Full and Final settlement along with March month's salary in April. My previous organization considered it as April month's salary and provided IT computation sheet which shows this income for FY2016-17.

    My query is -

    1. My march month's salary should fall in which FY. 2015-16 or 2016-17?

    2. Other FnF settlement amount should fall in which FY. 2015-16 or 2016-17?

  2. ZED

    ZED Well-Known Member

    As per S.15 Salary is chargeable to tax on accrual basis.
    S15. The following income shall be chargeable to income-tax under the head "Salaries"—

    (a) any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not;

    When filing the return, show it as income for F.Y 15-16.
  3. sumitgupta22

    sumitgupta22 New Member

    As per company rules, last month's salary would be paid as part of FullAndFinal settlement after 30 days of Last Working Day in the organization.

    Does that mean the salary became due on 29.04.2016 or still it would be considered as FY2015-16 's salary ?
  4. ZED

    ZED Well-Known Member

    The answer itself lies in your post.

    You yourself said that PAYMENT will be after 30 days of Last Working Day.
    Accrual came first. Payment is in respect of what has been accrued.
    We see accrual as per the agreement. Once salary is accrued, employer is liable to pay it aswell. If he does not pay then you can sue him, right? You can sue him only if the salary has accrued, you can not sue for future salary against which no work was performed and it isn't due either.

    Income will fall under F.Y 15-16
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