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Resignation letter format: fifteen versions, and the sentences that decide what happens next

Most resignation templates are a paragraph of gratitude and a date. This one is written around what the letter actually does — it proves when you resigned, states the last working day your later deadlines depend on, and it is the first document anybody reads if the exit goes wrong.

Quick Answer

How do I write a resignation letter in India?

Keep it to four things: that you are resigning, the position, your intended last working day as a date, and a request that your settlement and exit documents be issued. No reasons, no grievances, no criticism, and nothing agreed about notice pay before you have seen it calculated.

The reason to be this disciplined is that the letter is doing legal work you cannot see, and two different dates are doing two different jobs. The acknowledgement proves the letter was received and fixes when notice started — which is what settles when your notice period ends and whether any shortfall arises. Your last working day — the date the resignation takes effect — is what the statutory deadlines turn on: final wages within two working days of it, gratuity payable on the termination of employment, and a service certificate within ten days where standing orders apply. A relieving letter itself has no universal central statutory deadline. The last working day also decides your completed years of service, which for anyone near their fifth anniversary is worth more than any negotiation in the settlement. Every sentence you add beyond the four is one that can be quoted back at you.

Estimated time: About five minutes
Cost / impact: Free · no signup · runs in your browser
What you need: Your designation, employee ID, notice period, intended last working day

What to put in, and what never to put in writing

The single most common mistake in an Indian resignation letter is that it says too much. People write a paragraph explaining why they are leaving, or a line thanking a manager they are in fact escaping, or — worst — a sentence accepting that notice pay will be recovered. Each of those is a gift to whoever reads the file later, and none of them makes the exit go faster.

Put these in

That you are resigning, and from which position.
Your intended last working day, as a date.
That you will complete handover and return company property.
A request for the settlement, the relieving letter, the experience certificate and the TDS certificate (Form 130, formerly Form 16).
A request for written confirmation of the last working day.

Leave these out

Why you are leaving — no reason is required, and any reason can be used.
Criticism of a manager, a team or the company, however deserved.
An account of a grievance. That belongs in its own letter, not bundled into an HR routine.
Agreement to a notice recovery you have not seen calculated.
A promise about availability after you leave that you cannot keep.
Where you are going next, or what you are being paid there.

None of this means being cold. The generator's standard version ends with a line of genuine thanks, because there is no cost to it and a resignation that reads as hostile makes the four weeks that follow harder than they need to be. The distinction is between a courtesy and a commitment.

All fifteen formats, and which one you need

The generator above carries a version for each of these. They differ in exactly one respect — the clause that states the notice position — because that is the clause everything else turns on. Pick by your situation rather than by tone.

Choosing between the fifteen resignation letter formats
Your situation	Use	The thing to watch
You will serve the full notice in your contract	Standard resignation	State the last working day as a date, not as “after 60 days”. The two are not the same once a holiday falls in the middle.
You want to leave earlier than your notice allows	Request to leave before notice ends	This is a request, not an entitlement. Ask what the shortfall would be calculated on before you accept a date.
You want notice waived, or you will pay it out	Request to waive or buy out	Ask for the days, the per-day rate and the salary component in writing before anything is deducted.
You are leaving without notice, for cause	Resignation with immediate effect	The highest-risk version. Say what the cause is at the category level and reserve your rights; take advice before relying on it.
You are still on probation	Resigning during probation	Probation notice is often a fraction of the confirmed period. Check the clause — HR sometimes quotes the wrong one.
You are retiring or reaching superannuation	Retirement notice	Gratuity and leave encashment are the operative asks, so name them explicitly in the letter.
You are serving exactly one month	One month's notice	States the period and the date together. “One month” and “30 days” are not always the same clause — check which yours says.
You would rather not explain why	Personal reasons	A complete and professional answer. Resist the urge to add a second sentence softening it.
You have accepted another job	Taking up another opportunity	Name the move, never the employer, the salary or the comparison. All three get repeated.
You are going back to full-time study	Higher studies	A course start date is a fixed external deadline, which usually makes an early release easier to get, not harder.
You are moving city or country	Relocation	Ask about a remote or transferred arrangement before the notice period starts running, not after.
You are leaving because of your own health	Health grounds, serving notice	Ask for the reason to be noted on the record. It can matter to the tax treatment of your PF balance and to insurance entitlements.
You cannot serve the full notice and accept a deduction	Shortfall in notice, accepted	Accept the principle, not the arithmetic. Ask for the clause, the salary component and the divisor in writing before anything is deducted.
Your fixed-term contract is ending	Completion of a fixed term	Not a resignation. No notice recovery should arise, and gratuity for a fixed-term employee is computed pro rata rather than on the five-year rule.
You are not returning after maternity leave	Resignation after maternity leave	Ask how notice is treated in these circumstances, and that everything accrued to your last working day is in the settlement.

How long notice actually has to be

There is no national answer, and anyone who gives you one is describing a market convention. No provision of the Code on Wages, the Code on Social Security or the Industrial Relations Code prescribes the notice period a resigning employee must serve, or the salary component a recovery for unserved notice is computed on. Notice is a creature of your contract, read with your employer's policy and, where they apply, certified standing orders.

That has a practical consequence worth more than the convention itself. If your appointment letter is silent on the basis for a recovery, your employer has to identify the clause it is relying on — and the first useful thing you can do is ask it to, in writing, before any deduction is made rather than after.

Notice period norms, and who has to give more

Days of notice typically required, by sector. These are contractual conventions, not law — no Indian statute fixes a notice period for a resigning employee. Your appointment letter is the authority on yours.

Notice you must give
Notice the employer must give

The takeaway: the number to look at is not the length but the difference between the two bars. A contract asking ninety days of you and offering thirty in return is not describing a notice period, it is describing a cost of leaving — and it is the single most negotiable clause in an Indian offer letter, because it costs the employer nothing today to make it symmetrical. If you are already inside one, work out whether serving or buying out is cheaper before you commit to a date.

View the figures as a table

Typical notice periods by sector
Sector	You give	They give	Gap	Note
IT services and consulting	90 days	30 days	60 days	The widest gap in the market, and the sector where buyout clauses are most common.
Product and technology firms	60 days	60 days	—	Often symmetrical, and often negotiable down at offer stage.
Banking and financial services	90 days	90 days	—	Long but usually symmetrical, with garden leave used instead of a buyout.
Manufacturing	30 days	30 days	—	Shorter, and more likely to be governed by certified standing orders.
Startups and small firms	30 days	30 days	—	Shortest, but also the least likely to be documented clearly.
During probation, any sector	15 days	15 days	—	Usually a fraction of the confirmed period. HR quotes the wrong one surprisingly often.

Email, printed letter, or both

Send the email. The printed copy is for the file, and for the small number of employers who still run a physical register. What matters is not the medium but whether you can later prove the date it was received.

Sending a resignation by email compared with a printed letter
	Email	Printed letter
Proof of the date	Automatic, and in your own sent items.	Only if you get a signed acknowledgement or send it by speed post.
Who to address it to	Your reporting manager, with HR copied.	A named person, with their designation.
What can go wrong	Sent only to a work address you later lose access to.	Handed over with nobody acknowledging receipt.
The fix	Copy your personal email address on the same message.	Ask for a signed and dated acknowledgement on your copy.
When you need the printed one	—	Where policy requires a signed form, or the relationship has already gone wrong.

The takeaway: copy your personal email address on the message you send. It is one extra recipient, it costs nothing, and it is the difference between having the dated record and asking a company you no longer work for to find it for you.

What the letter sets running

A resignation letter is not an announcement, it is the event that starts several clocks at once. These are the ones worth knowing before you choose a date.

Deadlines and consequences that run from a resignation
What	Runs from	Why it matters to the letter
Notice period	The date the letter is received	Which is why an acknowledgement matters more than the letter. Without it, the start date is whatever HR says it is.
Final wages	Your last working day	Payable within 2 working days of it under the Code on Wages.
Gratuity	The termination of employment	Which makes your completed years of service a function of the date you put in the letter.
Leave encashment	Your last working day	The balance on that date is the one that gets paid out. Leave taken during notice reduces it.
PF exit date	Your last working day	Your employer should report it. If it is wrong or missing, no final PF settlement claim will go through.
Any notice recovery	The gap between the notice due and the notice served	Which is why you never agree a figure in the resignation letter itself.

The takeaway: two different dates are doing two different jobs, and conflating them is the commonest error in an Indian exit. The date of receipt starts the notice period; the last working day starts everything else.

The four documents to ask for in the letter itself

Every version in the generator asks for these, and the reason is practical rather than legal: a request made in the resignation letter is a request made while you still have a working email address and a manager who answers. The same request made eight months later is a different and much harder job.

Exit documents to request in a resignation letter, and the position on each
Document	What it proves	The position on timing
Full and final settlement, itemised	What you were paid and what was deducted, line by line.	Wages within 2 working days of your last working day under the Code on Wages. Ask for it itemised — a single total hides a missing line.
Relieving letter	That you were released, which a new employer's background check will ask for.	There is no universal central statutory deadline for one, which is exactly why asking early matters. What to do if it is withheld.
Experience or service certificate	Where you worked, for how long, and in what role.	A service certificate is an entitlement where standing orders apply, on a much shorter timetable than a relieving letter. How the two differ.
TDS certificate (Form 130, formerly Form 16)	Salary paid and tax deducted and deposited for the year.	Issued annually from your employer's TDS return, so for a mid-year exit it arrives well after you leave. Give them a personal email address.

The takeaway: only the first of these has a short statutory clock on it. The other three depend on an employer still being willing to help, which is a resource that depletes from the day you resign — so ask for all four in the letter, and give a personal email address for the one that will arrive months later.

Work out your last working day Serve or buy out?If the settlement does not arrive

The date on your letter is the most valuable thing in it

Every other decision in your exit is negotiable at the margin. The date is not — it either clears a threshold or it does not, and the largest threshold in an Indian exit is the five completed years that gratuity turns on.

Gratuity accrued, by completed years of service

Months of wages, using the statutory 15/26 formula. Independent of your salary, so the shape is the same for everyone.

The takeaway:gratuity does not build up gradually. It is worth nothing for four years and then, in a single day, becomes worth about two and a half months' wages — and every year after that adds only another 0.58. If you are anywhere near the fifth anniversary, the date you resign on is worth more than anything you will negotiate in the settlement. Check whether you qualify before you work out the amount.

View the figures as a table

Gratuity accrued in months of wages by completed years
Completed years	Months of wages payable
1	Nil — not yet qualified
2	Nil — not yet qualified
3	Nil — not yet qualified
4	Nil — not yet qualified
5	2.88
6	3.46
7	4.04
8	4.62
9	5.19
10	5.77

This is why the sequence matters. Work out your last working day first, check what it does to your completed service, and only then write the letter — rather than writing the letter and discovering afterwards that six more weeks would have been worth two and a half months' wages.

Two related points people get wrong here. The rounding rule you may have read about — six months or more counts as a full year — applies to the gratuity amount, not to eligibility, so four years and seven months does not become five. And there is a separate, genuinely contested argument that four years plus 240 days qualifies; courts have gone both ways on it. The eligibility checker works out which of the three positions you are in and roughly when you would cross each threshold.

What resigning changes about your money

Resigning rather than being let go changes three things and leaves the rest alone. Unpaid salary, leave encashment, gratuity and your provident fund do not care who ended the employment. These three do:

Notice runs in the other direction. When you resign you owe notice; when your employer ends the employment they normally owe you notice or pay in lieu. Which way the shortfall runs is what decides whether the notice line on your statement is a deduction or a payment. Work out my last working day →
A notice recovery may be set against your settlement. Most contracts permit it. The disagreement is almost never about the principle and almost always about the pay component the per-day rate was calculated on. Ask for the clause and the working before the settlement is processed, not after. Serve it or buy it out →
Retrenchment compensation does not arise. Where retrenchment provisions apply, compensation is owed on top of the ordinary settlement and carries its own tax exemption. That is not available on a resignation, which is one reason to be clear in the letter about what is actually happening. Tax on exit payments →

One small point worth knowing before anyone quotes it at you: goods and services tax is not payable on notice pay recovered by an employer. If a deduction on your statement carries a GST component on the notice recovery, that is worth querying in writing with the amount and the rate applied.

How to send it, and how to prove you did

The letter is only half of it. What you actually need is a record that it was delivered and when, because the acknowledged date proves delivery and normally fixes when your notice began — and because “I told my manager in a call” is not a date anybody can act on. The statutory deadlines for final wages, gratuity and any service certificate run from your last working day, not from the acknowledgement.

The delivery routine, in order

1Tell your manager first, in person or on a callSending the letter cold is a needless way to make the next four weeks unpleasant. Have the conversation, then send the letter the same day so the record follows the courtesy.
2Email it to your manager, with HR copiedFrom your work address, with the letter both in the body and attached as a PDF. The body text is what survives an attachment nobody opens.
3Blind-copy your personal email addressYou will lose access to your work account, often on your last day and sometimes before it. This is the copy you will still have in eight months when somebody asks.
4Ask for written acknowledgement of the last working dayOne sentence, in the letter itself. An acknowledgement naming the last working day is the employer's own record of the date your final wages, gratuity and any service certificate are counted from.
5Hand over a signed hard copy if policy requires oneSome employers still ask. Do it after the email, not instead of it, and keep a photograph of the signed copy with the receiving signature and date on it.

Do not resign through an HR portal alone.Several Indian HR systems have a “submit resignation” workflow that produces no timestamped copy you control and no document you can produce later. Use it if your employer requires it, but send the email as well.

Where this sits in your exit

Seven things happen when you leave a job in India, and they fall due in this order — not the order most people expect. Your final wages are due before your relieving letter, and both are due before the rest of the settlement.

This page
Resignation submitted
Day 0Contract / policy
The day your letter is delivered and acknowledged
Still ahead
Last working day
End of noticeContract / policy
Notice period in your appointment letter, less any waiver
Still ahead
Final wages paid
2 working daysStatutory
Your last working day
Still ahead
Relieving and experience letters
10 daysConditional
Your last working day
Still ahead
Gratuity paid
30 daysStatutory
The date the gratuity becomes payable
Still ahead
Rest of the settlement
Policy, often 30–45 daysContract / policy
Your last working day
Still ahead
PF withdrawn or transferred
Your own timingYou control this
Your exit date being reported — by the employer, or by you after two months

This page
Resignation submitted
Day 0Contract / policy
An acknowledgement proves the letter was received and fixes when notice started. It is not itself the trigger for the statutory payment deadlines — those run from your last working day.
From: The day your letter is delivered and acknowledged
Write my resignation letter
Still ahead
Last working day
End of noticeContract / policy
Your notice period comes from your contract, not from statute. The date it lands on decides your service length, your final month's salary and your leave balance.
From: Notice period in your appointment letter, less any waiver
Work out my last working day
Still ahead
Final wages paid
2 working daysStatutory
Wages for the days you actually worked. This is the shortest deadline in the whole exit and the one employers most often miss.
From: Your last working day
Chase unpaid wages
Still ahead
Relieving and experience letters
10 daysConditional
A service certificate is due within ten days where the Model Standing Orders apply to your establishment and you are a worker rather than a manager or a supervisor on more than ₹18,000 a month. Outside that, the relieving letter is a contract and policy question, not a statutory one.
From: Your last working day
Request my relieving letter
Still ahead
Gratuity paid
30 daysStatutory
The employer must determine the amount, notify you and the competent authority, and pay within thirty days — with simple interest running if it is late.
From: The date the gratuity becomes payable
Gratuity not paid
Still ahead
Rest of the settlement
Policy, often 30–45 daysContract / policy
Leave encashment, bonus, reimbursements and any notice adjustment. These run on your contract and your employer's policy, which is why a blanket “two working days” demand for the whole settlement is easy to deflect.
From: Your last working day
Settlement not received
Still ahead
PF withdrawn or transferred
Your own timingYou control this
Your PF sits with the EPFO, not your employer, so it is never part of the settlement. Your employer should report your date of exit, but if it does not, you can mark it yourself on the member portal once two months have passed since the last contribution.
From: Your exit date being reported — by the employer, or by you after two months
PF claim stuck or rejected

Resignation submittedThis page: An acknowledgement proves the letter was received and fixes when notice started. It is not itself the trigger for the statutory payment deadlines — those run from your last working day. Write my resignation letter →
Last working day: Your notice period comes from your contract, not from statute. The date it lands on decides your service length, your final month's salary and your leave balance. Work out my last working day →
Final wages paid: Wages for the days you actually worked. This is the shortest deadline in the whole exit and the one employers most often miss. Chase unpaid wages →
Relieving and experience letters: A service certificate is due within ten days where the Model Standing Orders apply to your establishment and you are a worker rather than a manager or a supervisor on more than ₹18,000 a month. Outside that, the relieving letter is a contract and policy question, not a statutory one. Request my relieving letter →
Gratuity paid: The employer must determine the amount, notify you and the competent authority, and pay within thirty days — with simple interest running if it is late. Gratuity not paid →
Rest of the settlement: Leave encashment, bonus, reimbursements and any notice adjustment. These run on your contract and your employer's policy, which is why a blanket “two working days” demand for the whole settlement is easy to deflect. Settlement not received →
PF withdrawn or transferred: Your PF sits with the EPFO, not your employer, so it is never part of the settlement. Your employer should report your date of exit, but if it does not, you can mark it yourself on the member portal once two months have passed since the last contribution. PF claim stuck or rejected →

Reading the badges. A statutory deadline is written into the Code and applies whatever your contract says. A conditional one applies only where your establishment meets a threshold — the ten-day service certificate, for instance, comes from standing orders that reach establishments of three hundred or more workers. A contract / policydeadline exists only because your appointment letter or your employer's policy created it, which is where most of the exit actually lives. And you control this marks the step nobody else has to take for you — the provident fund, where you can mark your own date of exit if your employer has not.

Frequently asked questions

What should a resignation letter contain in India?+

Four things and nothing more: that you are resigning, the position you are resigning from, your intended last working day, and a request that your settlement and exit documents be issued. Everything else is optional and most of it is a risk. A resignation letter is read twice — once by your manager this week, and once by a lawyer if the exit goes wrong — and the second reading is the one to write for.

Should I give a reason for resigning in the letter?+

No. There is no obligation to give a reason and very little upside in doing so. A reason that is flattering commits you to a story you may not want later; a reason that is critical hands your employer a document to characterise your exit by. If you genuinely need something on record — unpaid salary, a change to your terms, a safety concern — put it in a separate letter written for that purpose, where you control the framing and it is not bundled into a routine HR document.

Can I resign with immediate effect in India?+

You can stop attending, but that is not the same as having no consequence. Your notice period comes from your appointment letter, and leaving before it runs out normally triggers a recovery of notice pay from your settlement, which most contracts expressly permit. Resigning with immediate effect for cause — non-payment of salary, a material change to your terms made without your consent — is a different situation, and the letter should say so explicitly rather than leaving it as an unexplained walk-out. Take advice before relying on cause, because the consequence of being wrong is a recovery you then have to argue about.

Should I send my resignation by email or as a hard copy?+

Both, and email first. The email gives you a timestamp, a delivery record and a copy you still have after your access is switched off. That proves when notice started and therefore when your notice period ends — it is not itself what triggers the statutory payment deadlines, which run from your last working day. A signed hard copy handed over afterwards satisfies employers whose policy requires one. Send the email to your reporting manager with HR copied, from your work address, and blind-copy your personal address so you keep the thread.

Who should I address my resignation letter to?+

Your reporting manager, with HR copied — unless your appointment letter names someone specific, in which case follow it, because a resignation delivered to the wrong person is an argument about when notice started. Address a named person rather than a department. A letter addressed to "HR" is nobody's job to acknowledge, and the acknowledgement is the part you actually need.

Does resigning affect my gratuity?+

Only through the date. Resignation is an ordinary qualifying exit for gratuity — an employer who suggests gratuity is limited to retirement or termination is simply wrong. What the date decides is whether you have completed the required continuous service by your last working day, and because gratuity is worth nothing at four years and roughly two and a half months' wages at five, the date on your letter can be worth more than anything you negotiate in the settlement.

Can my employer refuse to accept my resignation?+

An employer can decline to relieve you early, and can insist that you serve the notice your contract requires. What an employer cannot do is keep you employed indefinitely against your will. In practice the disputes here are about the date rather than the fact — whether notice was waived, when it started, and whether a shortfall is being recovered. That is exactly why a dated, acknowledged letter that states the last working day explicitly is worth more than a conversation.

Should I mention notice pay or a buyout in my resignation letter?+

Only if you are actually asking for one, and then in a version written for it. Agreeing to a recovery in your resignation letter, before you have seen the calculation, gives away the argument you are most likely to win — no statute fixes whether a recovery is computed on basic or on gross, so the base comes from your contract alone — and the difference between the two is material. Ask for the clause, the number of days and the per-day rate in writing, and check them against your appointment letter before you accept a figure.

What is the format for a resignation letter with one month's notice?+

Identical to any other resignation letter, with one clause changed: state that the letter is one month's notice and give the resulting last working day as a date. Two cautions. Check whether your appointment letter says "one month" or "30 days", because they are not the same clause and they can resolve to different dates once a month of 31 days or a run of holidays falls in the middle. And give the date rather than the duration — "my last working day will be 14 November" cannot be disputed, whereas "one month from today" can be.

How do I write a resignation letter for personal reasons?+

Name it as personal and stop. "I am writing to formally resign from my position as [designation], for personal reasons, with effect from [date]" is a complete sentence and a complete explanation. The temptation is to add a softening second sentence, and that second sentence is where people volunteer something they later wish they had not. You are under no obligation to explain, and an employer who presses for a reason is asking rather than requiring.

What if I am resigning because of health reasons?+

Say that the reason is your own health, give no medical detail, and ask for the reason to be noted on the record. The record matters more here than in any other resignation: ill-health is one of the grounds on which a provident fund withdrawal is excluded from tax however short your service, under Schedule XI paragraph 8(1)(b) of the Income-tax Act 2025, and it can also matter to insurance or benefit entitlements. Provide whatever certification HR asks for separately, so the clinical detail does not live in the resignation letter itself.

Is a resignation letter different if my fixed-term contract is just ending?+

Yes, and treating it as a resignation can cost you money. The expiry of a fixed term is not a resignation, so no notice recovery should arise — and gratuity for a fixed-term employee is computed pro rata rather than gated on five years of continuous service in the way an ordinary resignation is. The right letter confirms that the term is concluding, that you are not seeking renewal, and asks for both of those positions to be confirmed in writing. There is a version in the generator for exactly this.

Can I withdraw my resignation after submitting it?+

Sometimes, and it is entirely a matter of agreement rather than right. Until your employer has accepted the resignation, a withdrawal request is often allowed; once it has been accepted and acted on — a replacement hired, a relieving date confirmed — the employer is generally entitled to hold you to it. If you want to withdraw, do it in writing immediately and ask for written confirmation that the resignation is treated as withdrawn and that your service is continuous. A verbal "don't worry about it" is the thing that causes the dispute six months later.

What should I do if my employer does not acknowledge my resignation?+

Follow up in writing within a few days, attaching the original email and asking for written confirmation of the date it was received and of your last working day. The acknowledgement is doing real work: it fixes when the notice period started, and therefore whether any shortfall arises. If there is still no response, send the same request to HR and to your manager together, and keep the thread. Silence is not an extension of your notice period, and an employer that has not acknowledged your letter can later assert a later start date than the one you intended.

1
Confirm the last working day before you send the letter
The date decides your completed years of service, and therefore whether gratuity arises at all. It is the one part of the letter you cannot revise later.
Notice period calculator
2
Ask for your relieving and experience letters in the same week
Not after you leave. The request is easy while you still have a working email address and a manager who replies.
Relieving letter request generator
3
Set up the rest of the exit file
Twelve documents, four you send and eight you chase, each with its own deadline and its own route if it does not arrive.
Exit documents checklist

Sources for the figures on this page

Working days within which wages must be paid after removal, dismissal, retrenchment or resignation
Code on Wages 2019, s.17(2), in force from 21 November 2025. The appropriate Government may prescribe a different time limit.
View sourceChecked 2026-08-11
Maximum gratuity payable under the gratuity statute (Code on Social Security 2020 from 21 November 2025; Payment of Gratuity Act before that)
Code on Social Security 2020, s.53(3) — gratuity "shall not exceed such amount as may be notified by the Central Government"; Ministry of Labour & Employment, FAQs on Labour Codes (January 2026), Q13: the maximum gratuity as notified by the Central Government "is currently 20 lakhs". Before 21 November 2025: Payment of Gratuity Act 1972, s.4(3), read with notification S.O. 1420(E) dated 29 March 2018
View sourceChecked 2026-09-22
Is GST payable on notice pay recovery by an employer?
CBIC Circular No. 178/10/2022-GST dated 3 August 2022, para 7.5, headed "Forfeiture of salary or payment of bond amount in the event of the employee leaving the employment before the minimum agreed period": such amounts are recovered "not as a consideration for tolerating the act of such premature quitting of employment but as penalties", and "are not taxable as consideration for the service of agreeing to tolerate an act or a situation". A recovery for leaving without serving the contractual notice period is a forfeiture of salary for leaving before the agreed period, which is the situation para 7.5 addresses.
View sourceChecked 2026-09-14

Written and reviewed by Deepak Middha, Chartered Accountant (ICAI, India) and founder of LayoffNext.

Legal and tax positions last checked 22 September 2026Editorial standards

Deepak MiddhaFounder of LayoffNext

Deepak Middha is the founder of LayoffNext and a Chartered Accountant (ICAI, India). A U.S. immigrant with nearly 20 years of experience — and 17 years in hedge fund and private equity administration, including as Vice President of Fund Accounting at NAV Fund Administration Group and Associate Director of Private Equity and Real Estate at SS&C Technologies — he builds free, plain-language layoff tools and guides for employees, H-1B workers, and immigrant families.

Updated September 22, 2026

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