Salary Meaning Under Income Tax Act

Meaning of salary. 51 Any person responsible for paying any income chargeable under the head Salaries shall at the time of payment deduct income-tax 6 on the amount payable at the average rate of income-tax 7 computed on the basis of the 8rates in force for the financial year in which the payment is made on the.

Taxability Of Esop Under Income Tax Act 1961

THE DEFINITION OF SALARY.

Salary meaning under income tax act. Definition of Word Salary or Income by way of Salary Section 17 1 According to Section 17 1 salary includes the following amounts received by an employee from his employer during the previous year. Interest on balance in RPF in excess of specified limit. The statute enjoins every employer to estimate the liability of tax deductible at source and to deduct tax at an average rate.

Housing accommodation medical facility interest free loans etc. Basic salary bonus commission allowances etc as well as non-monetary facilities eg. If any amount received from a former employer in relation to the services that you have rendered to him during your tenure of employment then the amount received will be taxable under the head salary.

Income tax is defined as the tax levied on the annual income earned by a person. The employer must estimate this tax liability at the very beginning of the financial year in accordance with. But receipts for all kinds of services rendered cannot be taxed as salary.

The amount of tax applicable to you will depend on how much money you earn as income over a financial year. As per Indian Income Tax Act Salary includes-Wages. However income tax act 1961 defines the term salary us 17 1 to include the following monetary as well as non monetary payments -.

The term salary under Income Tax Act has been defined to include all sums that an employee receives from his employer during his tenure of service. The term salary for the purposes of Income-tax Act 1961 will include both monetary payments eg. You might be getting your income as salary for doing some job or as profits from your business or in any other manner.

Iii of clause 2 or proviso to clause 2 of Section 17. The definition of Income as given in the Act us 2 24 is an inclusive definition. However leavetravel concessionnot included in salary will be classified as an expense for the purposes.

Salary in simple words means remuneration of a person which he has received from his employer for rendering services to him. Salary in common parlance means any amount paid by an employer to his employees in lieu of services rendered by them. Ie apart from the items listed in the definition any receipt which satisfies the basic condition of being income is also to be treated as income and charged to income tax accordingly.

The existence of an employer-employee relationship is a must for a payment to be taxed under the head salaries. Section 15 16 and 17 of the Income tax act 1961 deal with the computation of income under the head Salaries. It includes monetary value of those benefits and facilities provided by the employer which are taxable.

It is therefore taxable in the hands of the employee subject to the exemption under clause 5 of section 10of theIncome-taxAct. Computation of Salary Income Section 15-17 Salary income of an employee is to be computed in accordance with the provisions laid down in sections 15 16 and 17. Income is anything and everything a person earns.

Within the meaning of salary. 20 March 2008 The definition of income under the Income Tax Act is of an inclusive nature. INCOME UNDER THE HEAD SALARY.

A in relation to an employer being a company other than a banking company which has not made the arrangements prescribed under the Incometax Act for the declaration and payment within India of the dividends payable out of its profits in accordance with the provisions of section 194 of that Act sixtyseven per cent of the available surplus in an accounting year. Any remuneration paid by an employer to his employee in consideration of his service is called Salary. Only those receipts which are in the character of income can be assessed to tax.

For this the employer is required to determine the salary payable to the employee and accordingly compute the tax liability. Value of any perquisites. In the present case the dividends were received of shares which were held as investments.

Amount contributed by the employer towards the recognized provident fund in excess of 12 of salary. Taxpayers can make their income tax payment TDSTCS payment and. 2 24 5 145 of IT Act 1961Income All receipts are not income.

Section 17 1 defined the term Salary. Any gratuity over and above the exemption limit. Section 15 as discussed earlier gives the scope of this head and tells us that which incomes shall form part of this headSection 16 gives deductions to be allowed out of incomes taxable under this head.

D Value of perquisites specified in sub-section 2 of Section 17 of the Income Tax Act.

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