PayPal and Oracle layoffs in India and tax implications
PayPal just let go of around 600 employees in India, offering one month's salary as severance plus job support.
Oracle is also planning big layoffs, 2,000 to 3,000 people.
If you're affected or just curious, here's what these changes mean for your wallet, especially when it comes to taxes.
Severance taxed, gratuity and leave exemptions
Severance pay counts as salary for tax purposes in India, so it gets taxed at your usual income slab: no special breaks like the ₹5 lakh Voluntary Retirement Scheme exemption.
But there's some good news: gratuity payments are tax-free up to ₹20 lakh for private sector employees covered under the Payment of Gratuity Act, while government employees are fully exempt, and nongovernment people can get leave encashment exempt up to ₹25 lakh.
Pro tip: ask HR for a clear breakup of your package so you don't miss out on any exemptions you're eligible for.