INCOME FROM SALARY
"Explore the key aspects of income from salary - including what is considered as salary, principles governing salary taxation, and how it is charged based on due or receipt. Learn about various components that form part of salary and the implications of voluntary surrender. Stay informed to manage your income effectively."
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Presentation Transcript
II BCOM INCOME FROM SALARY
Basic of charge sec.15 Salary due from the present or former employer for the service rendered during the previous year. Salary received before it becomes due. Advance salary. Arears of salary , if it was not assessed earlier.
Principles of salary Voluntary surrender of salary: Salary is chargeable on due basis. It will become income only after it has fallen due. Therefore, voluntary surrender or forgoing of salary after it has become due will be mere application of income and hence taxable.
Salary includes.. Sec. 17(1) Wages Annuity or pension Fees, commission, perquisites or profits or profit in lieu of salary Gratuity Any advance salary Leave salary Annual accretion and Transferred balance
Salary Chargeable Basis Salary is always charged on due or receipt which is earlier. Due Basis: Eg. Salary for month. March 2016 has become due in 2015-16 but paid in April 2016 will be included in total income of the PY 2015-16 Receipt Basis: Eg. Advanced salary for the month April 2016 is received is received in march 2016 will be included in total income of the PY 2015 -16 Salary once taxed on a particular basis cannot again be taxed on another basis.
