Finance Act, 1968
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Relief for certain sums chargeable under Schedule E. |
3.—(1) (a) Subject to paragraph (b), this section applies to any payment which is chargeable to tax under Schedule E and which is made to the holder of an office or employment to compensate for— | |
(i) a reduction or a possible reduction of future remuneration arising from a reorganisation of the business of the employer under whom the office or employment is held or a change in the working procedures, working methods, duties or rates of remuneration of such office or employment, or | ||
(ii) a change in the place where the duties of the office or employment are performed. | ||
(b) This section does not apply to— | ||
(i) a payment to which section 114 of the Income Tax Act, 1967 , applies, or | ||
(ii) a payment to any of the persons specified in paragraphs (i) to (iii) of the proviso to section 228 (1) of the Income Tax Act, 1967 , or to a person who is a part-time employee by reason of not being required to devote substantially the whole of his time to the service of his employer. | ||
(2) Where an individual has received a payment to which this section applies, he shall be entitled, on making a claim in that behalf and on proof of the relevant facts to the satisfaction of the inspector, to have the total amount of income tax and sur-tax payable by him for the year of assessment for which the payment is chargeable reduced to the total of the two following amounts: | ||
(a) the aggregate of the amounts of income tax and sur-tax which would have been payable by him for that year if he had not received the payment, and | ||
(b) income tax and sur-tax on the whole of the payment at rates respectively ascertained in the manner specified in subsection (3). | ||
(3) There shall be ascertained the additional amounts of income tax and sur-tax respectively, over and above the amounts referred to in subsection (2) (a), which would have been payable by the holder of the office or employment if his total income for the year of assessment referred to in subsection (2) had included one-third only of the payment and the rates of income tax and sur-tax respectively for the purposes of subsection (2) (b) shall then be ascertained by dividing the additional amounts of income tax and sur-tax respectively computed in accordance with this subsection by an amount equal to one-third of the payment. | ||
(4) (a) Relief from tax under this section shall, in all cases, be given by way of repayment. | ||
(b) A claimant shall not be entitled to relief under this section in respect of any income the tax on which he is entitled to charge against any other person, or to deduct, retain, or satisfy out of any payment which he is liable to make to any other person. |