Recently there was a case in ITAT Chennai where Smt Govindarajulu who was a former employee of BSNL and who had opted for the BSNL VRS-2019 Scheme and received ex-gratia compensation upon separation from service paid tax on the money she received after claiming only Rs 5 lakh tax exemption. The issue is she could have got Section 10(10B) tax exemption on VRS but she mistakenly claimed only Rs 5 lakh.
While filing her income tax returns for AYs 2020-21 and 2021-22, she claimed exemption of only Rs 5 lakh under Section 10(10C), treating the payment as compensation received under a voluntary retirement scheme, and offered the balance ex-gratia amount to tax.
