The 60-second version
Indian offer letters often bind 30–90 day notice — buyout lets you join faster by paying employer. I negotiate cap, get TDS clarity, and map receipt in Form 16 if employer pays you for notice served abroad.
Buyout is a contract negotiation — not a statutory right
Returning NRIs often have overlapping notice abroad and new India start date — buyout payment to foreign or Indian employer needs written agreement.
If Indian employer pays notice-period salary without work (garden leave), it is taxable salary with TDS 192 — not retrenchment compensation.
Recovery of notice shortfall by employer from salary is adjustment — not separate deduction under Chapter VI-A.
Salary stack: Form 16 guide.
Notice period scenarios
| Scenario | Tax treatment | Document |
|---|---|---|
| Serve full notice abroad | Foreign payroll to end date | Foreign Form 16 / W-2 |
| Buyout to foreign employer | Not Indian salary — no 192 | Buyout receipt + SWIFT |
| Garden leave India salary | Fully taxable 192 | Indian Form 16 |
| Notice pay from India employer | Taxable perquisite if paid to old employer | Offer letter clause |
| Recovery for short notice | Salary adjustment | F&F statement |
Notice period negotiation sequence
Read both contracts
Foreign exit notice vs India joining notice.
Negotiate buyout cap
Fixed amount vs daily rate × remaining days.
Tax gross-up
Ask if buyout paid by new employer is grossed up.
Align joining date
HR letter confirming start after buyout effective.
Archive proofs
Buyout invoice, release letter, final payslips.
Overlap flow
Notice period kit
- Foreign release letter.
- Buyout agreement.
- India offer letter.
- Last foreign payslip.
- Joining date HR email.
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Form 67
Foreign salary in overlap month may need Form 67 if India also taxes same income.
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Pay buyout from India salary?
Possible via payroll deduction — confirm TDS on net pay.
90-day notice standard?
Varies by level — senior roles 90d, junior 30d common.
Garden leave abroad?
Taxed in country paying salary — India from residency date.
Notice vs severance?
Severance is separate — see severance pay guide.
Startup no notice?
At-will rare in India — still check offer letter.
Remote during notice?
India taxes from residency date even if serving foreign notice remotely.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.