CBDT clarifies BSNL-MTNL VRS compensation tax treatment
In short
The CBDT issued a new clarification on BSNL and MTNL's VRS-2019 compensation. It said the ex-gratia payment is not retrenchment compensation, and amounts above five lakh rupees will still be taxed as salary income.
This matters for retirees and employees who claimed or plan to claim tax benefits. They may need to check whether their filings match the new rule.
What the reporting says
The CBDT issued a clarification that ex-gratia compensation under BSNL and MTNL's VRS-2019 is not retrenchment compensation. The notification says the payment falls under Section 10(10C) of the Income-tax Act and that compensation above five lakh rupees remains taxable as salary income.
Why it matters
The CBDT issued a notification clarifying that ex-gratia compensation under BSNL and MTNL's VRS-2019 is not retrenchment compensation. The reporting says it is governed by Section 10(10C) of the Income-tax Act, with compensation above five lakh rupees remaining taxable as salary income.