Telangana Jagruthi president and former state legislative council member Kalvakuntla Kavitha on Friday appealed the Centre to provide total temporary relief, rather than a partial or enhanced exemption of tax on the severance packages being offered by tech companies to their employees while laying them off. Kavitha urges Centre to provide tax relief in severance to techies
“I urge the Hon’ble Union Finance Minister @nsitharaman to examine this issue with urgency and adopt a compassionate and pragmatic approach by providing total temporary relief, rather than a partial or enhanced exemption,” Kavitha said, taking to X.
She said severance packages are currently taxed under the head, “profits in lieu of salary” as per the Income Tax Act, 1961. In effect, this results in employees being taxed at the very moment they lose their source of income—when financial vulnerability is at its peak.
“While existing provisions provide limited exemptions depending on how severance is structured, they are neither adequate nor responsive to the realities of sudden and large-scale layoffs,” Kavitha, daughter of former Telangana chief minister K Chandrasekhar Rao, said.
She pointed out that large-scale layoffs were not a situation for incremental relief, but called for a decisive, one-time policy response. “There is a compelling case for granting a complete, temporary tax exemption on severance packages for individuals affected by such layoffs,” she said.
Kavitha said this would ensure that impacted families retain the full financial cushion intended to support them during a period of transition and uncertainty.
In an earlier post on X, the Telangana Jagruthi president expressed concern over growing job insecurity in India’s technology sector amid large-scale layoffs impacting thousands of IT professionals. She warned that the rapid push towards artificial intelligence should not come at the cost of workers’ livelihoods, particularly in Hyderabad.
“I have said it in the past, and I will say it again! This is beyond scary. First Jack Dorsey’s 4,000, now reports of the massive Oracle layoff (est. 30k) impacting 12,000+ lives in India, mostly in hubs like Hyderabad,” she tweeted.
She said while Artificial Intelligence is a necessary tool for the future, it shouldn’t be a death knell for our workers today. “The @revanth_anumula government seems completely clueless, ignoring the elephant in the room while our IT professionals face this uncertainty. Telangana needs a roadmap now. Who is looking out for these thousands of families?” Kavitha asked.