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AMRITENDU TAPAN GHOSH (Engg)     26 May 2013

Legal action against my employer

SIR,I WAS GIVEN IN OFFER LETTER HRA 3000 PER MONTH DURING JOINING. SINCE 1 YEAR I USED TO GET THAT BUT NOW MY COMPANY IS SAYING THAT I WILL NOT GET THAT SINCE I STAY WITH MY PARENTS, THEY HAD GIVEN MY HRA FOR 8 MONTHS AND DID NOT TELL TO SUBMIT NEW AGREEMENT PAPER ,NOW THEY ARE TELLING TO DEDUCT MY 8 MONTHS HRA FROM SALARY AND CANCEL MY HRA ,IS IT LEGAL?????



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 3 Replies

Hemang (Advocate)     26 May 2013

What the terms and conditions are very relevant. The terms and conditions have to be interpreted. But one thing is certain that the House Rent Allowance is a financial benefit given to the employee and it is based on either terms in the letter of appointment, or under the service rules framed by the Company, or the standing orders. Such payment has to be treated as "established customery benefit" When any benefit is being withdrawn, the Company is required to issue a show cause notice before discontinuing the customery benefit. 

 

You may approach the Labour Court in this behalf, if you are falling within the definition of worman and the Company, an employer. 

Kumar Doab (FIN)     27 May 2013

Mr. Hemang has given valuable advice. Kindly follow it.

 

Rent can be paid to parents.

 

It is felt that there is exemption from production of rent receipts for employee to DDO (Employer) if HRA being received is up to Rs.3000/pm.

 

However, they need to account for the same under ‘Income from other sources’ and will be entitled to pay tax for the same.

Sham transactions can only spell trouble under scrutiny, therefore the employee and assessee should  steer clear of these.

 

Show your appointment letter, salary slip to I.Tax Lawyer/CA and proceed under their expert advice.

AMRITENDU TAPAN GHOSH (Engg)     27 May 2013

i have given my employer agreement paper when they asked to submit but they are not accepting it. company is of mahindra & mahindra in maharashtra. my luggage is there in room but i stay with my parents because they are old.


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