Such compensation is tax-free upto the limits given below provided he gets compensation under the provisions of the Industrial Disputes Act
Under Industrial Disputes Act, a workman is allowed retrenchment Compensation equal to 15 days’s average pay for each completed year of service or any part thereof in excess of six months
An amount calculated in accordance with the provisions of clause (b) of Section 2SF of the Industrial Disputes Act;
Notified Limit. The monetary ceiling has been removed with effect from assessment year 1989-90. The limit shall be prescribed by the Central Govt. from time to time in Official Gazette. This limit will not be less than 5,00,000.
Actual compensation received, whichever is less.