INCOME TAX T BALAMURUGAN Income Under the Head
INCOME TAX T. BALAMURUGAN Income Under the Head Salaries
Features of salary • • Employer – Employee Relationship Salaries and Business Profits Salaries and Professional income Voluntary Surrender of Salary – Real and Fictional Personal gifts and other voluntary payments Tax-free salaries Salary or pension received by ‘UNO’ Employees Previous year of Salary Income
Computation of taxable Salary • • • Bonus Fees and Commission Over time payments Basic Salary grade or scale of pay
Treatment of Provident Fund • • Statutory Provident fund Recognized Provident fund Unrecognized Provident fund Public Providential fund
Allowances • An allowance is a cash payment to the employee on a regular basis is addition to Basis salary to meet certain expenses required to be interrupted by him in connection with duties of his office. – Fully exempted – Fully Taxable – Partially Taxable
Fully exempted • Allowances to Government employee, render services outside India. • House rent allowance granted to Judges of high court and Supreme court. • Allowance received by an employee of UNO from his employer. • Sumptuary allowance given to High court and Supreme court.
Fully taxable • • DA CCA Medical allowance Lunch allowance Servant allowance Family allowance Tiffin allowance
Partially Taxable • • HRA Entertainment allowance for Govt. employees. Education allowance Uniform allowance Helper allowance Academic research allowance Daily allowance
Perquisites • • • Rent free accommodation provided Value of any concession in the matter of rent Value of any benefit or amenity Obligation of employee met by the employer Any sum payable by the employer to effect an insurance • Values of other fringe benefits
Deductions allowed under the head salary • Entertainment allowance [Sec. 16(ii)] • Professional Tax [Sec. 16(iii)]
Deduction under section 80 C • Computation of Gross qualifying amount • Computation of Net qualifying amount • Amount of deduction
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