Taxability of amount received before or after joining the employment – Profit in lieu of salary

Any amount due to or received, whether in lump sum or otherwise, by an assessee from any person before his joining any employment with that person or after cessation of his employment with that person shall be considered as “Profit in lieu of salary”.

Profit in lieu of salary is a part of salary income. It is included in gross salary and taxed accordingly. Profit in lieu of salary generally means any payment made to an employee on lieu of salary even if the same has no connection with the profits of the employer. The word ‘profit’ is used only to convey any ‘advantage’ or ‘gain’ by receipt of any payment by the employee.

Moreover, now the terminal payments by employer are also considered as “Profit in lieu of salary” and taxed accordingly. is here to solve all your tax worries, be it relating to Tax Returns, Tax Support or Tax Planning. Just contact us; we are here to relieve you from all your tax worries. provides most hassle free tax return filing/ online return filing experience. Once you have collected, your salary certificate and other documents, we request you to please log in to or you can also directly mail at to submit the details. Upon receiving the documents, we would contact you to file your return of income.

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