Luthra and Luthra

‘Taxsutra expert column: Taxability of severance pay – understanding the current scenario.’

Partner, Sumit Mangal and Associate, Radhika Sharma at Luthra and Luthra Law Offices India discuss the taxability of Severance Pay in an insightful article published in Taxsutra.

Severance Pay refers to the payment made to an employee upon the termination of their employment, typically categorized as part of their salary. However, if there is a dispute about whether Severance Pay should be subject to taxes as part of the salary, it is now considered taxable under the category of income from other sources according to Section 56(2)(xi) of the Income Tax Act, 1961 (ITA).


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