Business taxiation.

Topic : SALARY Presented by : SURBHI SHARMA Class : BBM(I.B) S.Y Submitted to : MR.

Salary.
In lay mans language, salary refers to, a fixed regular payment made by an employer to an employee. As per BUSINESS TAXIATION , section 17(1) defines salary to include :-

SALARY
1. SALARY.2. ALLOWANCE S 4. PROFITS IN 3. PERQUISITE LIEU OF SALARY S

Here, under section 17,salary includes,:1.Wages. 2. Any annuity or pension. 3. Any gratuity. 4. Any fees, commission, perquisite or profit in lieu of salary or in addition to any salary or wages. 5. Any advance of salary. 6. Leave encashment. 7. The contribution made by the Central Govt. , to the account of an employee under a new pension scheme- section 80 CCD 8. The accumulated transferred balance from unrecognized provident fund to recognized provident fund account.

CHARGEABILITY (SECTION 15) :

Under This Section 15, three types of incomes fall under SALARIES

SALARY DUE :Salary Becomes Due When The Right To Demand Salary Arises To The Assessee. Tax Is Payable For The Employee Even If

SALARY PAID :Any salary paid in the previous year by an employer though not due to him is taxable, e.g. Advance salary

ARREARS OF SALARY PAID :Any arrears of salary paid or allowed to him in the previous year by the employer.

SALIENT FEARUTES OF SALARY :EMPLOYER AND EMPLOYEE RELATIONSHIP. TAX FREE SALARY. RECEIPT FROM PERSON OTHER THAN EMPLOYER PAYMENT AFTER PROFESSION CESSATION OF AL EMPLOYMENT INCOME. VARIOUS FORMS WHEN IS SALARY DUE..

COMMUTATIO N OF PENSION

VOLUNTAR Y FOREGOIN G SALARY. SCOPE..

LEAVE SALARY PAID TO LEGAL HEIRS.

SALARY & PENSION RECEIVED FROM FOREIGN GOVERNMENT

IN DETAILS THE SALIENT FEATURES OF SALARY

Employer

and employee relationship :-

Every servant is known as an employee, but an agent may not be an employee. It is necessary that the payment to fall under head salaries there must exist relationship of an employer and employee between the payer and the payee. Tax free salary :If any tax free salary is paid to the employee, he/she has to include the total salary in the income, i.e net salary plus tax earned from the employer on behaly of the employee.

Receipt from person other than employer :Remuneration received from person other than the employer is not salary income but it is taxable under the head INCOME FROM OTHER SOURCES. E.g remuneration received from the university for assessing answer books is taxable under the head mentioned above. Communication of pension :A lump-sum amt. received in commutation of pension is not taxable under salary income in case of a govt. servant only. Professional income :If the employment is merely

Payment after cessation of employment :If any payment is made to an employee after cessation of employment, it is taxable under the head salaries, because it is the remuneration for the services rendered in the past. Voluntary foregoing salary :If a person voluntarily foregone his salary, it is taxable on the ground that the salary is taxable whether paid or not. But the apparent foregoing of a fictional salary would not attract ant tax. Leave salary paid to legal heirs :The leave salary paid to the heirs of time the deceased employee in

 Various forms :There is no difference between salaries and wages. Infact, any amount received from employer in the discharge of duties is includible in salary. Commission paid at a fixed percentage of turnover also partakes the character of salary. Scope :For the purpose of credibility under the head in the private sector, section 17 defines the term salary, perquisites and profits in lieu of salary. In other words, amount accruing to the employee under any of these sub-heads will be taxed

Thank you..!