NAME : DISHA

Bcom Hns(evening)
0332488814
 In a job employee receives salary in various forms; in
cash, few benefits in kind like house and certain
benefits after retirement such as pension. Govt does
not charge tax on whole cash and retirement benefits,
some exemptions are given. In case of benefits in kind,
certain principles are provided for determining their
value.

 Salary, in simple words, means remuneration of a

person, which he has received from his employer for
rendering services to him.
 relationship of payer and payee must be of employer
and employee and this relation is said to exist only if
there is nexus over the method of doing the work of
other person. This relationship is also called master-
servant relationship or principal agent relationship.
 no distinction between salary and wages
 Salary received from employer, whether one or more
than one is included in this head.
 In case where there is no control over the work of other
person then remuneration shall be taxable under other
head of income. E.g. partner of a firm, director if not
employee, members of parliament, guest lecturers.
 Salary is taxable either on due basis or receipt basis which
ever is earlier
 However arrears of salary, not charged to tax in an earlier
previous year, are taxable in the previous year in which it is
paid.
 If any salary paid in advance is included in the total income
of any previous year, it shall not be included again in the
total income when the salary becomes due.
 Any salary, bonus etc by whatever name called received by a
partner from the firm shall not be regarded as salary.
According to Section 17(1) of the Act salary includes: 1. wages 2. Any
Annuity or pension 3. Any gratuity
 4. Any fees, commission, perquisites or profits in lieu of salary or in
addition salary or in addition to salary or wage.
 5. Any advance salary
 6. Any payment received by an employee in respect of any period of
leave not availed of by him;
 7. The annual accretion to the balance at the credit of
an employee participating in a recognised provident fund, to the extent
to which it is chargeable to tax, and
 8. The aggregate of all sums that are comprised in the transferred of an
employee participating in a recognised provident fund, to the extent to
which it is chargeable to tax.
 9. the contribution made by the Central Government [or any other
employer] in the previous year, to the account of an employee under a
pension scheme referred to in section 80CCD]