Introduction to salary
- 1. The First Head of Income is Income From Salary. Provision Relating to Salary included section 15 to 17 of Income Tax Act 1961
- 2. Definition of the Head Salary Any Remuneration received by an employee in consideration of service rendered to his employer is Called Salary. Salary includes monetary value of benefits and facilities provided by an employer also.
- 3. As per section 15 the following incomes are taxable under head salaries 1. Any salary amount due to assesses it may be from former employer or present employer in previous year. 2. Salary paid or allowed to assesses in the previous year by or on behalf of an employer, or former employer though not due or before it becomes due to him. 3. Any arrear of salary paid or allowed in pervious year by employer if not taxed for any previous year
- 4. According to Section 17, Receipts Included under salaries a. Wages b. Annuity and pension c. Gratuity d. Fees, commission, Perquisites, Profit in lieu of Salary, In addition to any salary or wages e. Any advance of salary f. Leave salary g. Contribution and interest to PF h. Remuneration for additional duties
- 5. Under Section 16 the following deduction are allowed in Salary Income EntertainmentAllowance is deductible for only government employees u/s 16 ii Standard deduction Rs. 50000 or Salary income which ever less in deductible u/s16(ia) Professional tax
- 6. Particulars Rs. Basic Salary Bonus Commission Allowance a. Fully taxable b. Partly taxable Perquisites Profit in lieu of salary Arrears of Salary Advance Salary Retirement benefits a. Gratuity b. Pension c. Leave encashment xxxx xxxx xxxx Xxxx Xxxx Xxxx Xxxx Xxxx Xxxx Xxxx Xxxx Xxxx Xxxx GROSS SALARY Xxxx Less: Deduction U/S 16 Standard Deduction 16(1a) i. Entertainment Allowance16(ii) ii. Professional Tax16(iii) NET SALARY Xxxx Xxxx Xxxx XXXX Format of computation of Taxable Salary