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Regarding Tax On Performance Pay / Bonus

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  • Regarding Tax On Performance Pay / Bonus

    Hello all,
    Last month I received my Performance Pay or Bonus from my company for 2011-12. However, out of the bonus amount I was supposed to get, I got only 85% of it - remaining 15% has been taken as tax. Now, can I claim the full 15% tax refund - if I invest the same in Mutual Fund / PPF / or any Section 80C tax savings scheme? If not, then how much of bonus tax am I allowed to claim as per the law?
    Regards,
    Ekta

  • #2
    Hi Ekta,
    Bonus / Performance pay is taxable, few companies do not refund tax once it is deducted and paid to Income Tax authorities. Yes, you can ask for adjustment in remaining 6 months salary till March-2013. Tax is always deducted based on your yearly estimated income.
    If you are under taxable income category after doing all investment then tax will be deducted. You can provide investment declaration to your employees so that in next 6 months tax will be deducted based on your declared investment and estimated income.

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    • #3
      Hi
      The Statutory Bonus usually your one month basic will be paid as Bonus this is non taxable. The PBB is taxable all Mutual funds, etc are savings It will consider only 1 Lakh under savings.

      The expenses like Driver Salary(Max 8000/Month), HRA(20000 or 40% of Basic/Month) , Medical Reiumbursement(1250/Month), Convayance(800/Month), Children Tution fee (As per actuals), Interest on House Loan) etc are exempted from IT.

      The normal tax exemption is for 200000/Annum.

      If you can share your Gross and PBB I'll workout and send you the detailed procedure to claim.

      Regards,
      Debalina

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