Compensation under a voluntary retirement scheme is taxable under section 17(3) of the Income-tax Act, 1961, as profit in lieu of salary. However, under section 10(10-C), such compensation is exempt subject to a limit of Rs5 lakhs in the case of each employee who receives the compensation.
This is subject to the condition that the voluntary retirement scheme should be framed by the company for the purpose of reducing the staff strength. Hence, the vacancies caused by those employees who retire under the scheme cannot be filled up by the company. Other conditions are also imposed which have to be strictly complied with. Hence, if these conditions are not fulfilled, the compensation received by you would be fully liable to tax.

Investments can be treated as concealed income under section 69 of the Income-tax Act, 1961 if it can be shown that the investor had not declared his income from which he could have made the investments. There are several decisions of Courts in which it has been held that if the investment cannot be substantiated by the known sources of the tax payer’s income, the department would be justified in treating such investments as the undisclosed income of the investor.
Therefore, if your brother has filed his tax returns in the past and the income disclosed therein is sufficient to justify the investment made in the fixed deposit, there would be no scope for taxing the fixed deposit amount as his undisclosed income. On the other hand, if he has not been filing his tax returns on the ground that he has no taxable income, and the amount of investment cannot be justified with reference to his known sources of income, the fixed deposit amount can be treated as his undisclosed income which would be upheld by the Courts in appeal.

While placing the discussion paper entitled “Entry of new banks in the private sector” on its website, the Reserve Bank in its press release of 11th August, 2010 indicated that it will frame comprehensive guidelines for licensing of new banks, after receiving comments and suggestions on the discussion paper. Thereafter, applications would be invited for setting up new banks.
The Reserve Bank has now announced that it proposes to hold discussions on the aforesaid paper during September 2010. However, such discussion will only be with representatives of industry associations, organisations representing financial and non-financial interests and those representing professional bodies. The Reserve Bank has made it clear that it does not intend to hold discussions individually with corporate houses or any other person intending to set up a bank in India.