Nature of Income
Compensation/award received at the time of his retrenchment
An amount as per section 25F(b) of the Industrial Dispute Act, 1947 or Rs 5,00,000 whichever is lower. In special case any amount received as per any scheme approved by the Government
Conditions laid down for Tax Exemption
The compensation received on retrenchment would include
Amount received at the time of the closing down of the undertaking.
Amount received at the time of transfer ownership of an undertaking subjective to condition (refer salary section).
In special cases looking to the need for special protection to the workmen the Government may approve the scheme for compensation to be paid to workmen which will be exempt from tax paid as per such scheme