No income tax on salary cut for not serving notice period

No income tax on salary cut for not serving notice period

MUMBAI: The Income-tax Appellate Tribunal (ITAT) which adjudicates Income-tax (I-T) disputes, has held that an amount deducted by an employer for not serving out a notice period cannot be brought to tax. 

In this case, two companies while settling dues had deducted salary for the notice period which the person had not served, but this deduction was not taken into account during tax assessment. However, ITAT (Ahmedabad bench) in its order dated April 18, said only salary received would be taxable, and not portions which were deducted by a company for not serving out a notice period.